. The Perry Company wants to raise additional equity capital.

The company decides to issue 5,000 shares

of $25 par preferred stock with detachable warrants. The package of the stock and warrants sells for
$105. Each warrant enables the holder to purchase two shares of $10 par common stock at $30 per
share. Immediately following the issuance of the stock, the stock warrants are selling at $14 each. The
market value of the preferred stock without the warrants is $96. (1) Prepare a journal entry for Perry
Company to record the issuance of the preferred stock and the detachable warrants. (2) Assuming that
all the warrants are exercised, prepare a journal entry for Perry to record the exercise of the warrants.
(3) Assuming that only 70 percent of the warrants are exercised, prepare a journal entry for Perry to
record the exercise and expiration of the warrants. 6. Bennett Company paid cash dividends totaling
$150,000 in 2003 and $75,000 in 2004. In 2005, Bennett intends to pay cash dividends of $800,000.
Compute the amount of cash dividends per share to be received by common stockholders in 2005 under
each of the following assumptions. Treat each case independently. There were no dividends in arrears as
of January 1, 2003. (1) 25,000 shares of common; 100,000 shares of 6 percent, $50 par cumulative
preferred. (2) 25,000 shares of common; 50,000 shares of 6 percent, $50 par noncumulative preferred.