Use the same information from E15- 15 now assuming that Fontlyn is an IFRS reporter. Prepare the journal entry for when Fontlyn issued the preferred shares.
IN E15-15
Fontlyn Inc. issued $ 20 million of $ 10 par preferred stock on February 1, 2016. The company issued 1 million shares. The preferred stock has a 4% fixed annual cash dividend and has no maturity date. Assume the holder of the preferred shares has the option to require redemption.
a. How would Fontlyn account for the preferred stock dividends?
b. What is the journal entry when the firm issued the preferred shares?