E11-11 Recording Dividends and Preparing a Statement of Retained Earnings [LO 11-2, LO 11-3]

The annual report for Sneer Corporation disclosed that the company declared and paid preferred dividends in the amount of $100,000 in the current year. It also declared and paid dividends on common stock in the amount of $2 per share. During the current year, Sneer had 1 million common shares authorized; 300,000 shares had been issued; and 100,000 shares were in treasury stock. The opening balance in Retained Earnings was $800,000 and Net Income for the current year was $300,000.

Question: Prepare a journal entry to close the dividends account.