The stockholders' equity section of Lemay Corporation shows the following on December 31, 2021:

Preferred stock4%, $100 par, 5,000 shares outstanding $ 500,000

Common stock$10 par, 60,000 shares outstanding 600,000

Paid-in capital in excess of par 200,000

Retained earnings 119,000

Total stockholders' equity $1,419,000

Assuming that all of the company's retained earnings are to be paid out in dividends on 12/31/21 and that preferred dividends were last paid on 12/31/19,

1. Calculate how much the preferred and common stockholders should receive if the preferred stock is cumulative and fully participating.

2. After ascertaining the amount of dividend payable to common and preferred shareholders, prepare an adjustment entry for the dividend declared.