Dividend Transactions and Calculations As of December 31, 2008, Nibley Corporation has 300,000 shares of $12 par-value common stock authorized, with 120,000 of these shares issued and outstanding.

Required:
1. Prepare journal entries to record the following 2009 transactions:
Jan. 1 Received authorization for 150,000 shares of 5%, cumulative preferred stock with a par value of $15.
2 Issued 14,000 shares of the preferred stock at $20 per share.
June 1 Reacquired 30% of the common stock outstanding for $25 per share.
2 Declared a cash dividend of $20,000. The date of record is June 15.
30 Paid the previously declared cash dividend of $20,000.
2. Determine the proper allocation to preferred and common stockholders of a $150,000 cash dividend declared on December 31, 2009. (This dividend is in addition to the June 2 dividend.)
3. Interpretive Question: Why didn’t the preferred stockholders receive their currentdividend preference of $10,500 in part (2)?