Cash Dividends

Sanders Corporation has the following shares outstanding: 8,000 shares of $50 par value, six percent preferred stock and 50,000 shares of $1 par value common stock. The company has $328,000 of retained earnings. At year-end, the company declares its regular $3 per share cash dividend on the preferred stock and a $2.2 per share cash dividend on the common stock. Three 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.	AnswerCash DividendsDividends Payable - Preferred StockDividends Payable - Common StockCash	$Answer	$Answer
	AnswerCash DividendsDividends Payable - Preferred StockDividends Payable - Common StockCash	Answer	Answer
	Dividends Payable - Common Stock	Answer	Answer
	To record declaration of dividend on preferred stock and common stock.
b.	AnswerCash DividendsDividends Payable - Preferred StockDividends Payable - Common StockCash	Answer	Answer
	Dividends Payable - Common Stock	Answer	Answer
	AnswerCash DividendsDividends Payable - Preferred StockDividends Payable - Common StockCash	Answer	Answer
	To record payment of dividends on preferred and common stocks.