Cedar Corporation is authorized to issue 15,000 shares of 6%, $10 par, cumulative preferred stock. Early in Year 1, it sold 3,000 shares of preferred stock for $25 per share.

Required a. Record the entry for the issuance of preferred stock during Year 1.

b. Assume the company is preparing financial statements for Year 4. If the company had not declared or paid dividends in any year to preferred shareholders, what would the company report as dividends in arrears on December 31 of Year 4?

Dividends in arrears $