PART III (10 Points)

The stockholders equity section of the Karr Corporation at 09/01/2018 included the following:

6% preferred stock, $100 par value, cumulative,

10,000 shs. authorized, 8,000 shs. issued & outstanding. . . . . . .$ 800,000

Common stock, $10 par value, 250,000 shares authorized,

200,000 shares issued and outstanding . . . . . . . . . . . . . . . . . . $2,000,000

Due to poor earnings, no preferred dividends were declared/paid in 2017and are currently in arrears.

At their 09/15/2018 board meeting Karr Corporations directors declared their intention to pay a $500,000 dividend on 10/15/2018 to stockholders of record as of 10/01/2018.

Prepare the journal entries required on 9/15/2018, 10/01/2018 and 10/15/2018.