Prelow Ltd has authorized shares at January 1, 2020 of 100,000 ordinary shares with a par value of $20 per share, 50,000 and 5% cumulative, non-participating preference shares with a par value of $50 per share. 80% of the ordinary shares were sold for $30 per share and 20% for $35 along with the preference shares at par at January 1, 2020. Dividends of $120,000 were declared at December 31, 2020. The dividends were paid on January 1, 2021.

• Prepare the journal entries at January 1, 2020
• Prepare the journal entries at December 31, 2020