At a companys December 15 meeting, the board of directors declared a total of $150,000 dividends payable to the common and preferred shareholders. The dividend is payable on January 15 to shareholders of record on December 31. No journal entry has been made to record this dividend. It is the companys practice to keep dividends payable to common and preferred shareholders in separate accounts.

There are 22,400 common shares with a balance of $416,182 at December 31, 20x2. There are 5,000 preferred shares each bearing an annual dividend of $8. The balance in the Preferred Shares account as at December 31, 20x2 is $300,000. The preferred shares are cumulative and fully participating in dividends in excess of $3.00 per common share. The preferred share dividends were last paid on December 31, 20x1. Participation is based on the share balances at Dec 31, 20x2.

Required Prepare the journal entry at December 31, 20x2 to record the declared dividend.