Preferred Stock

In Preferred Stock, if the issue price was $102, what number do you use to determine the cash debited?

1.02

In Preferred Stock, if the issue price was 105% of par, what number do you use to determine the cash debited?

1.05

In Preferred Stock, if the issue price was 306% of par, what number do you use to determine the cash debited?

3.06

In Preferred Stock, if the issue price was $452, what number do you use to determine the cash debited?

4.52

How is the accounting equation effected when preferred stock is sold? (What goes up?)

Assets and Equity ↑A = L + E↑

In a preferred stock sale, how do you determine the Paid in Capitol?

Cash - Preferred Stock

What does preferred stock come with?

Dividend Preference and Liquidation Preference

What do you debit and what do you credit in a preferred stock sale?

Dr. Cash Cr. Preferred Stock Cr. Paid In Capitol

What is liquidation preference? (Preferred Stock)

If liquidation occurs, preferred stockholders get paid before common stock holders, BUT AFTER THE CREDITORS

Preferred stockholders must get back their ___ _________ when liquidation occurs.

Par Value

What is dividend preference? (Preferred Stock)

Preferred Stockholders will get dividends before common stockholders

In a preferred stock sale, how do you determine the cash value?

Shares X Issue Price X Par Value

In a preferred stock sale, how do you determine the preferred stock value?

Shares X Par Value