Sunset Corporation stockholders' equity consisted of the following on January 1, 2006: Stockholders' Equity Paid-in capital Capital stock 6% Preferred stock, $100 par value, cumulative, 50,000 shares authorized, 30,000 shares issued and outstanding $ 3,000,000 Common stock, no par, $10 stated value, 1,000,000 shares authorized, 400,000 shares issued and outstanding 10,000,000 Total capital stock 13,000,000 Additional paid-in capital In excess of par valuepreferred $300,000 In excess of stated valuecommon 600,000 900,000 Total paid-in capital 13,900,000 Retained earnings (Note A) 4,100,000 Total stockholders' equity $18,000,000 Note A: Preferred dividends are in arrears for 2005. Instructions Prepare the appropriate journal entries, if any, for the following transactions in 2006. You may omit journal entry explanations but you should show computations. 1/25/06 Issued 20,000 shares of common stock for $40 per share. 2/18/06 The Board of Directors declared a cash dividend on preferred and common stock totaling $700,000, payable on March 15, to stockholders of record on February 28. (Record dividends payable on preferred and common stock in separate accounts.) 2/28/06 Date of record for cash dividends on preferred and common stock. 3/15/06 Paid the cash dividend to preferred and common stockholders. 5/20/06 Declared a 10% stock dividend on the common stock, payable on June 15, to stockholders of record on May 31. The market value of Sunset Corporation's common stock was $40 per share. 6/15/06 Distributed stock dividend to common stockholders. 7/10/06 Purchased 40,000 shares of common stock for the treasury at $40 per share.