On January 1, 2013 the Walter Allen Corp. was incorporated. The company issued the following stock for cash:
3,500,000 shares of no-par common stock were authorized; 1,811,000 shares were issued on January 1, 2013, at $37 per share.
900,000 shares of $110 par value, 8.7% cumulative, preferred stock were authorized, and 430,000 shares were issued on January 1, 2013, at $147 per share.
Net income for the years ended December 31, 2013, 2014, and 2015, was $15,570,000, $22,350,000, and $26,103,000, respectively. No dividends were declared or paid during 2013 or 2014. However, on December 17, 2015, the board of directors of Walter Allen Corp. declared dividends of $16,000,000, payable on February 9, 2016, to holders of record as of January 4, 2016.
Required:
A) Write the journal entries for:
1. the issuance of common stock and preferred stock on January 1, 2013.
2. the declaration of dividends on December 17, 2015.
3. the payment of dividends on February 9, 2016.
B) Of the total amount of dividends declared during 2015, how much will be received by preferred shareholders?