Response to the following questions:
1. a. Prepare the journal entry to record Stefan Company's issuance of 12,000 shares of $50 par value 6% cumulative preferred stock for $75 cash per share.
b. Assuming the facts in part 1, if Stefan declares a year-end cash dividend, what is the amount of dividend paid to preferred shareholders? (Assume no dividends in arrears.)
2. Describe how each of the following characteristics of organizations applies to corporations.
1. Duration of life
2. Owner liability
3. Legal status
4. Tax status of income
5. Owner authority and control
6. Ease of formation
7. Transferability of ownership
8. Ability to raise large capital amounts