13. Halverstein Company's outstanding stock consists of 7,000 shares of cumulative 5% preferred stock with a $10 par value and 3,000 shares of common stock with a $1 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends.

	Dividend Declared
Year 1	$	0
Year 2	$	6,000
Year 3	$	32,000

The amount of dividends paid to preferred and common shareholders in Year 2 is:

A. $3,000 preferred; $3,000 common.

B. $0 preferred; $6,000 common.

C. $6,000 preferred; $0 common.

D. $4,200 preferred; $1,800 common.

E. $3,500 preferred; $2,500 common.

28. Amortizing a bond discount:

A. Decreases the Bonds Payable account.

B. Increases cash flows from the bond.

C. Allocates a portion of the total discount to interest expense each interest period.

D.Decreases interest expense each period.

E. Increases the market value of the Bonds Payable.