Cash Dividends Sanders Corporation has the following shares outstanding 8,500 shares of $50 par value, six percent preferred stock and 55,000 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 Cash DividendsDividends Payable Preferred StockDividends Payable Common StockCash Cash DividendsDividends Payable Preferred StockDividends Payable Common StockCash Dividends Payable Common Stock To record declaration of dividend on preferred stock andcommon stock b Cash DividendsDividends Payable Preferred StockDividends Payable Common StockCash Dividends Payable Common Stock Cash DividendsDividends Payable Preferred StockDividends Payable Common StockCash To record payment of dividends on preferred and common stocks

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Aug 31, 2024

Cash Dividends Sanders Corporation has the following shares outstanding: 8,500 shares of $50 par value, six percent preferred stock and 55,000 shares of $1 par

Cash Dividends

Sanders Corporation has the following shares outstanding: 8,500 shares of $50 par value, six percent preferred stock and 55,000 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.	Cash DividendsDividends Payable - Preferred StockDividends Payable - Common StockCash
	Cash DividendsDividends Payable - Preferred StockDividends Payable - Common StockCash
	Dividends Payable - Common Stock
	To record declaration of dividend on preferred stock andcommon stock.
b.	Cash DividendsDividends Payable - Preferred StockDividends Payable - Common StockCash
	Dividends Payable - Common Stock
	Cash DividendsDividends Payable - Preferred StockDividends Payable - Common StockCash
	To record payment of dividends on preferred and common stocks.