Cash Dividends Rock Corporation has the following shares outstanding: 8,000 shares of $80 par value, nine percent preferred stock and 50,000 shares of $4 par value common stock. The company has $856,000 of retained earnings. At year-end, the company declares its regular $7.20 per share cash dividend on the preferred stock and a $6.40 per share cash dividend on the common stock. Two weeks later, the company pays the dividends.

a. Prepare the journal entry for the declaration of the cash dividends. b. Prepare the journal entry for the payment of the cash dividends.

General Journal
Ref.	Description	Debit	Credit
a.	AnswerCashCash dividendsDividends payable - Common stockDividends payable - Preferred stockRetained earningsStock dividendsTreasury stock	Answer	Answer
	Dividends payable - Preferred stock	Answer	Answer
	AnswerCashCash dividendsDividends payable - Common stockDividends payable - Preferred stockRetained earningsStock dividendsTreasury stock	Answer	Answer
	To record declaration of cash dividend.
b.	AnswerCashCash dividendsDividends payable - Common stockDividends payable - Preferred stockRetained earningsStock dividendsTreasury stock	Answer	Answer
	Dividends payable - Common stock	Answer	Answer
	AnswerCashCash dividendsDividends payable - Common stockDividends payable - Preferred stockRetained earningsStock dividendsTreasury stock	Answer	Answer
	To record payment of dividends.