The stockholders equity section of Nielsen Corporations December 31, 2011, balance sheet is as follows:

Stockholders Equity Contributed capital: Preferred stock (10%, $50 par, 10,000 shares authorized, 1,000 shares issued and outstanding). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50,000 Common stock ($15 par, 100,000 shares authorized, 5,000 shares issued and outstanding). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,000 Paid-in capital in excess of par, preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000 Paid-in capital in excess of par, common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000 Total contributed capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $152,000 Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102,000 Total stockholders equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $254,000

During 2012, Nielsen Corporation had the following transactions affecting stockholders equity: Jan. 20 Paid a cash dividend of $2 per share on common stock. The dividend was declared on December 15, 2011.

Aug. 15 Reacquired 1,000 shares of common stock at $20 per share. Sept. 30 Reissued 500 shares of treasury stock at $21 per share. Oct. 15 Declared and paid cash dividends of $3 per share on the common stock. Nov. 1 Reissued 200 shares of treasury stock at $18 per share. Dec. 15 Declared and paid the 10% preferred cash dividend. Dec. 31 Closed net income of $40,000 to Retained Earnings. (Revenues were $260,000; expenses were $220,000.) Also closed the dividends accounts to Retained Earnings.

Required: 1. Journalize the transactions. 2. Prepare the stockholders equity section of Nielsen December 31, 2012, balance sheet.

I am not quite sure about the dividends account. Could you explain more specifically about this?