Preferred Stock dividends: The journal entry is to the same accounts for preferred stock. However, it is typical that preferred dividend rates are given as either a dollar per share or a percentage and is presented before the par value of the stock in its description. If a dollar per share is given, multiply the rate amount times the number of outstanding shares. If the percentage is given, multiply the percentage times the dollar value of the preferred stock account.

A companys Board declares the appropriate preferred stock dividend. They currently have 12,000 shares of $3, $150 par value preferred stock. Hint: The dividend rate is $3 per share. Calculate the dividend amount as # of shares x rate: 12,000 x 3 = ___________ Write the journal entry.

dr. Retained Earnings__________________(#of shares x rate)

cr. Dividend Payable______________________

NOTE: The journal entry looks EXACTLY like the journal entry for common stock dividends.

A companys Board declares the appropriate dividend on its 200,000 outstanding shares of 2%, $100 par value preferred stock. The balance in the preferred stock account is $800,000. Hint: The dividend rate is 2%.

Dividend amount = account balance in $s x % = $800,000 x 0.02 = _________________

Write the journal entry.

The company has a preferred stock balance of $400,000 for its $5.50, $200 par value preferred stock. The appropriate dividend is declared. Because the dividend rate is given as a per share amount and not a percent, you will need to calculate the number of shares outstanding/issued and then calculate the dividend amount. Write the journal entry.

The company has a preferred stock balance of $1,200,000 for its 4%, $120 par value preferred stock. The appropriate dividend is declared. Write the journal entry