Problem 3 - 15 Points

Hodge Corporation issued 100,000 shares of $20 par value, cumulative, 6% preferred stock on January 1,

2013, for $2,300,000. In December 2015, Hodge declared its first dividend of $500,000.

Instructions

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 common

stockholders?

C.

If the preferred stock is cumulative, how much of the $500,000 would be paid to common

stockholders?

Problem 3 - 15 Points Hodge Corporation issued 100,000 shares of $20 par value, cumulative, 6% preferred stock on January 1, 2013, for $2,300,000. In December 2015, Hodge declared its first dividend of $500,000. Instructions 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 common stockholders? C. If the preferred stock is cumulative, how much of the $500,000 would be paid to common stockholders