In 2021, Blessing Home Corporation is authorized to issue 750,000 shares of $2 par value ordinary shares. During the year, the following selected transactions were incurred:

2021
Jan. 10	Sold 102,000 ordinary shares for $8 cash per share.
Jan. 15	Issued 10,000 ordinary shares in exchange for an equipment with a market value of $70,000.
Feb. 1	Issued 500 ordinary shares in exchange for legal services estimated to be worth $3,000 during the company's organization.

Required:

a. Journalize these transactions for 2021. (9 marks)

b. In October 2022, Blessing Home had the following shares outstanding when the company's board of directors declared $55,000 cash dividends:

Share capitalPreference, $100 par, 4%, 5,000 shares issued	$ 500,000
Share capitalOrdinary, $1 par, 750,000 shares issued	750,000

Allocate the cash dividends between the preference and ordinary shareholders assuming the preference shares are cumulative and nonparticipating and dividends are one year in arrears. (5 marks)

c. Should the company disclose dividends in arrears in their financial statement? Please discuss the differences between ordinary and preference shares, and state the reasons why companies may issue preference shares. (6 marks)