Acc280 Financial Accounting: E13-10 Al Corporation issued 100,000 shares of $20 par value

Acc280 Financial Accounting

E13-10
Al Corporation issued 100,000 shares of $20 par value, cumulative, 8% preferred stock on January 1, 2009, for $2,100,000. In December 2011, AI declared its first dividend of $500,000.

Instructions:
a. Prepare AI's journal entry to record the issuance of the preferred stock. (For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.)
b. If the preferred stock is not cumulative, how much of the $500,000 would be paid to common stockholders?
c. If the preferred stock is cumulative, how much of the $500,000 would be paid to common stockholders?
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