Question: StarLight Ltd. is authorized to issue 10,000, $4 noncumulative preferred shares. On January 13, it issued 3,000 preferred shares for $90 cash per share. (a)

StarLight Ltd. is authorized to issue 10,000, $4 noncumulative preferred shares. On January 13, it issued 3,000 preferred shares for $90 cash per share.

(a) Prepare a journal entry to record the transaction.

(b) Determine the total amount of dividends that must be paid to the preferred shareholders prior to paying a dividend to common shareholders.

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