Loki Corporation earned net income of $70,000 during the year ended December, 31 2016. On December 15, Loki had declared the annual cash dividend on its $0.50 preferred shares (10,000 shares issued for $100,000) and a $0.60 per share cash dividend on its common shares (25,000 shares issued for $50,000). Loki then paid the dividends on January 4, 2017.

Journalize the following for Loki Corporation.

Declaring the cash dividends on December 15, 2016.

Paying the cash dividends on January 4, 2017.

Did Retained Earnings increase or decrease during 2016? If so, by how much?