Question

6. Java Company earned net income of $85,000 during the year ended December 31, 2018. On December 15, Java declared the annual cash dividend on its 4% preferred stock (par value, $120,000) and a $0.25 per share cash dividend on its common stock (50,000 shares), Java then paid the dividends on January 4, 2019. Read the requirements Requirement 1. Journalize for Java the entry declaring the cash dividends on December 15, 2018. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Debit Credit 2018 Dec. 15 (3) Requirement 2. Joumalize for Java the entry paying the cash dividends on January 4, 2019. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Debit Date Accounts and Explanation Credit 2019 Jan. 4 (10) 1: Requirements 1. Journalize for Java the entry declaring the cash dividends on December 15, 2018. 2. Journalize for Java the entry paying the cash dividends on January 4, 2019 (1) O O No entry required O Cash Cash Dividends O Common Stock-Par Value O Dividends Payable-Common Dividends Payable-Preferred Paid-In Capital in Excess of Par-Common O Paid-In Capital in Excess of Par-Preferred O Preferred Stock-Par Value O Retained Eamings

Answer 1

Credit Debit 17,300 $ $ 4,800 12,500 Date Accounts and Explanation Dec. 15, 2018 Cash Dividends Dividends Payable-Preferred Dividends Payable-Common Declared a cash dividend Jan. 04, 2019 Dividends Payable-Preferred Dividends Payable-Common Cash Payment of cash dividend S 4,800 12,500 $ $ 17,300 Preferred Dividend = 4% * $120,000 Preferred Dividend = $4,800 Common Dividend = $0.25 * 50,000 Common Dividend = $12,500