Cash Dividends

At December 31, 2020, Woodstock Corp. has the following shares outstanding (all no par value):

200,000 common shares................................................................. $ 1,275,000

$5 preferred, 7,200 shares............................................................... $ 600,000

The preferred shares are cumulative and participating up to an additional 4%.

Dividends have not been paid since December 31, 2017.

Woodstock now wishes to declare a total cash dividend of $320,000.

Instructions

Prepare the entry for the dividend declaration, separating the dividend into the common and preferred portions. Show all calculations.