Travel Comfort Specialists, Inc. reported the following stockholders’ equity on its balance sheet at June 30, 2016:
Stockholders' Equity
Paid-In Capital:
Preferred Stock—6%, ? Par Value; 675,000 shares authorized, 200,000 shares issued and outstanding.................. $ 1,000,000
Common Stock—$1 Par Value; 9,000,000 shares authorized, 1,320,000 shares issued and outstanding.................. 1,320,000
Paid-In Capital in Excess of Par—Common...... 2,700,000
Total Paid-In Capital.............. 5,020,000
Retained Earnings.............. 11,900,000
Total Stockholders' Equity...........$ 16,920,000
Requirements
1. Identify the different classes of stock that Travel has outstanding.
2. What is the par value per share of Travel’s preferred stock?
3. Make two summary journal entries to record issuance of all the Travel stock for cash. Explanations are not required.
4. No preferred dividends are in arrears. Journalize the declaration of a $900,000 dividend at June 30, 2016, and the payment of the dividend on July 20, 2016.
Use separate Dividends Payable accounts for preferred and common stock. An explanation is not required.