CAPE Accounting Unit 1 · 2019 · Paper 2 · Question 1(a)

Jack Sparrow Inc. (JSI) reported shareholders' equity balances at 01 January 2017: 10% preferred shares (375 000, 40 000 authorized, 5 000 issued), common shares of 20 par value (200 000, 500 000 authorized, 10 000 issued), contributed capital in excess of par (30 000), retained earnings (1 130 000). During the year, JSI issued 1 000 shares of 10% preferred shares at 110 on 01 July 2017; issued 2 000 common shares at 25 on 01 October 2017; declared cash dividends on preferred shares and 0.25 per share on common stock on 01 December 2017; and paid the cash dividend on 31 December 2017.

Prepare the journal entries to record the transactions.