A1 Corporation issued 100,000 shares of $20 par value, cumulative 8 preference shares on January 1 2009, for $2,100,000 In December 2011, AI declared its first dividend of $500,000 Instructions (a) Prepare Als journal entry to record the issuance of the preference shares (b) If the preference share...

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A1 Corporation issued 100,000 shares of $20 par value, cumulative. 8% preference shares on January 1. 2009,

Question:

A1 issued 100,000 shares of $20 par value, cumulative. 8% preference shares on January 1. 2009, for $2,100,000. In December 2011, AI declared its first of $500,000.

Instructions
(a) Prepare Al’s journal entry to record the issuance of the preference shares.
(b) If the preference shares are not cumulative, how much of the $500,000 would be paid to ordinary shareholders?
(c) If the preference shares are cumulative, how much of the $500,000 would be paid to ordinary shareholders?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...