Hodge Corporation issued 100,000 shares of $20 par value, cumulative, 6% preferred stock on January 1, 2014, for $2,300,000. In December 2016, Hodge declared its first dividend of $500,000.

A. Prepare Hodge's journal entry to record the issuance of the preferred stock.

B. If the preferred stock is not cumulative, how much of the $500,000 would be paid to commonstockholders?

C. If the preferred stock is cumulative, how much of the $500,000 would be paid to commonstockholders?

E11-6
(a)
(b)
(c)