Terrific Comfort Specialists, Inc. reported the following stockholders’ equity on its balance sheet at June 30, 2014:

Stockholders’ Equity

Paid-In Capital:

Preferred Stock—5%,? Par Value; 650,000 shares authorized,

280,000 shares issued and outstanding .............$1,400,000

Common Stock—$ 1 Par Value; 5,000,000 shares authorized,

1,350,000 shares issued and outstanding ........... 1,350,000

Paid- In Capital in Excess of Par—Common .......... 2,400,000

Total Paid- In Capital ................... 5,150,000

Retained Earnings ..................... 12,300,000

Total Stockholders’ Equity ................ $ 17,450,000

Requirements

1. Identify the different classes of stock that Terrific has outstanding.

2. What is the par value per share of Terrific’s preferred stock?

3. Make two summary journal entries to record issuance of all the Terrific stock for cash. Explanations are not required.

4. No preferred dividends are in arrears. Journalize the declaration of a $ 600,000 dividend at June 30, 2014, and the payment of the dividend on July 20, 2014.

Use separate Dividends Payable accounts for preferred and common stock. An explanation is not required.