Rye Co. issued 50,000 shares of $20 par value, cumulative, 10% preferred stock on January 1, 2018, for $1,200,000. In December 2020, Rye declared its first dividend of $300,000.

Instructions:

a. Prepare Ryes 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?