Note 1: Issue of ordinary shares – 30,000 shares x $5.00 = $150,000 Double entry: Debit Bank Account $150,000 Credit Ordinary shares Account $150,000 Note 2:
Loan interest – 16% x $100,000 = $16,000 Double entry: Debit Loan Interest expense Account $16,000 Credit Bank Account $16,000 Preference dividends – 10% x $80,000 = $8,000. Double entry: Debit Bank Account $8,000 Credit Dividends paid Account $8,000 Ordinary dividends – 40¢ x{ [$200,000/$5] + 30,000 shares} = 40¢ x 70,000 shares = $28,000 Double entry: Debit Dividends paid $28,000 Credit Bank Account $28,000
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AuthorThe author holds a Bsc (Hons) Degree in Applied Accounting from Oxford Brookes University, England and enjoys a successful career as an Accounting Supervisor and a private tutor. Archives
May 2018
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