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.

Instructions:

(1) 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 COMMON stockholders?

(c) If the preferred stock is cumulative, how much of the $500,000 would be paid to COMMON Stockholders?