Eby Corporation Issued 200,000 Shares of $20 Par Value, Cumulative

Essay

Eby Corporation issued 200,000 shares of $20 par value, cumulative, 5% preference shares on January 1, 2012, for $4,800,000. In December 2014, Eby declared its first dividend of $800,000.
Instructions
(a) Prepare Eby's journal entry to record the issuance of the preference shares.
(b) If the preference shares are not cumulative, how much of the $800,000 would be paid to ordinary shareholders?
(c) If the preference shares are cumulative, how much of the $800,000 would be paid to ordinary shareholders?