Paid-in capital:

Preferred stock, 8.8%, 90,000 shares at $1 par $ 90,000 Common stock, 364,000 shares at $1 par 364,000

Paid-in capitalexcess of par, preferred 1,437,000

Paid-in capitalexcess of par, common 2,574,000

Retained earnings 9,735,000

Treasury stock, at cost; 4,000 common shares (44,000)

Total shareholders equity $14,156,00

1) Given the information above, on July 5, 2013 a 2% common stock dividend was declared and distributed. The market value of the common stock was $11 per share. Fractional share rights represented 20 equivalent whole shares. Cash was paid in lieu of the fractional share rights. The journal entry to record 2% common stock dividend on July 5. 2013 include:

A. A debit to cash account by $220

B. A credit to Common Stock account by $79,200.

C. A credit to Stock Dividends Payable account by $79,200

E. A credit to Paid-in Capital-Excess of Par account by $71,800.

Given the information above, on December 1, 2013 the board of directors declared the 8.8% cash dividend on the 90,000 preferred shares, payable on December 28 to shareholders of record December 20. The journal entry that Consolidated Paper, Inc. should prepare on December 2013 include:

A. A debit to Cash Dividend Payable by $7,920

B. A debit to Retain Earnings account by $7,920

C. A credit to Retain Earnings account by $7,920

D. A debit to cash Par account by $7,920.