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  3. after consulting with a lawyer, they fill in their

After consulting with a lawyer, they fill in their paperwork and request that the following...

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Accounting

After consulting with a lawyer, they fill in their paperwork and request that the following stock be authorized. Common Stock: 900,000 shares of $6 par stock. Preferred Stock: 100,000 shares of $90 par, 12%, cumulative stock. April 1. They issue 12,000 shares of Common Stock at $60 each. June 1. They issue 4,000 shares of Preferred Stock at $200 each. After a very successful year, they: Dec. 1 Declare a total cash dividend of $125,000 Dec. 10 Date of record Dec. 15 Pay the cash dividend that we declared on December 1st. Requirements:

a. Write out the journal entry for the issue of stock on April 1.

b. Write out the journal entry for the issue of stock on June 1

c. Showing your work and labeling your answers, calculate the dividend paid to the Preferred Stockholders.

d. Showing your work and labeling your numbers, calculate the dividend paid to the Common Stockholders.

e. Explain what cumulative preferred stock means? (To help explain, what if the company paid no dividend in the second year)

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