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IBM Corporation is authorized to issue 4,000,000 shares of $10 par value common stock. Equity...

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Accounting

IBM Corporation is authorized to issue 4,000,000 shares of $10 par value common stock. Equity accounts also include 8% preferred stock, $100 par value, non-cumulative, 40,000 shares authorized. Net Income in 2021 was $1,500,000.

During 2021, its first year of operation, the company has the following stock transactions.

Feb. 15 Issued 500,000 shares of common stock at $14 per share.

July 2 Issued 10,000 shares of preferred stock for $115 per share.

Nov. 5 The board of directors of IBM Corporation declared cash dividends on the preferred stock for the current year, to stockholders of record on December 1.

Dec. 15 Paid the dividends previously declared Nov. 5.

Dec. 25 The board declared cash dividends on the common stock equal to 25% of net income for the year, to stockholders of record on Jan 15.

Dec. 31 Prepare the closing entries for net income and dividends.

Instructions

Journalize the transactions for IBM Corporation.

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