Sheffield corp. is authorized to issue both preferred and common stock. the par value of the preferred is $50. during the first year of operations, the company had the following events and transactions pertaining to its preferred stock. feb. 1 issued 51,500 shares for cash at $54 per share. july 1 issued 67,000 shares for cash at $58 per share. journalize the transactions.

Explanation:

The journal entries are shown below:

On Feb 1

Cash A/c Dr $2,781,000       (51,500 shares × $54)

    To Preferred Stock $2,575,000      (51,500 shares × $50)

    To  Additional Paid-in Capital in excess of par - Preferred stock $206,000

(Being the issuance of stock is recorded and the remaining balance is credited to the additional paid-in capital account)

On July 1

Cash A/c Dr $3,886,000  (67,000 shares × $58)

    To Preferred Stock $3,350,000       (67,000 shares × $50)

    To  Additional Paid-in Capital in excess of par - Preferred stock $536,000

(Being the issuance of stock is recorded and the remaining balance is credited to the additional paid-in capital account)