On 12/31/2020, the balance sheet of Union Company reports Liabilities as follows:

Current liabilities $15,000,000

Long Term Notes Payable 8,000,000

Mandatory Redeemable Preferred Stock (Par Value) $10,000,000

(10% dividends) Issued 1/1/2018.

Plus: Additional Paid in Cap MRPS 2,000,000 12,000,000

Total liabilities $ 35,000,000

Assume that the redemption schedule states that:

Date Redemption value (% of par value)

1/1/2019 80%; 1/1/2020 90%; 1/1/2021 95%; and 1/1/2022 100%

Assume on July 1, 2020, holders of 50% of the MRPS redeemed their shares.

Required:

Make the journal entries for the issuance of the Preferred Stock (1/1/2018) and the redemption of 50% of the stocks on 7/1/2020.