Knudsen Corporation was organized on January 1, 2024. During its first year, the corporation issued 2,000 shares of \(\$ 50\) par value preferred stock and 100,000 shares of \(\$ 10\) par value common stock. At December 31, the company declared the following cash dividends: \(2024, \$ 5,000 ; 2025\), \(\$ 12,000\); and \(2026, \$ 28,000\).

Instructions

a. Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is \(6 \%\) and noncumulative.

b. Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is \(7 \%\) and cumulative.

c. Journalize the declaration of the cash dividend at December 31, 2026, under part (b).