Question 1 The stockholders\" equity section of Echota Corporation at December 3

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Question 1 The stockholders" equity section of Echota Corporation at December 31, 2016, included the following S% preferred stock, $100 par value, cumulative, 10,000 shares authorized, 8,000 shares issued and outstanding Common stock, $10 par value, 250,000 shares authorized 200,000 shares issued and outstanding $800,000 $2,000,000 Dividends were not declared on the preferred stock in 2016 and are in arrears On September 15, 2017, the board of directors of Echota Corporation declared dividends on the preferred stock for 2016 and 2017, to stockholders of record on October 1, 2017, payable on October 15, 2017 On November 1, 2017, the board of directors declared a *.75 per share dividend on the common stock, payable November 30, 2017, to stockholders o' record on November 15, 20 1. Prepare the journal entries that should be made by Echota Corporation on the dates indicated below September 15, 2017 October 1, 2017 October 15, 2017 November 1, 2017 November 15, 2017 November 30, 2017 dit account titles are automatically indented wher" the amount is entered. Do (If no entry is required, select-No entry" for the account titles and enter 0 for the amounts. not indent manually.)

Explanation / Answer

9/15/17

No entry for declaration of preferred dividend because the quantum of dividend amount is unknown before the record date.

10/1/17

Retained earnings Dr 80000 (8000*100*5%)*2

Preferred dividend payable Cr 80000

10/15/17

Preferred dividend payable Dr 80000

Cash cr 80000

11/1/17

No entry for declaration of dividend on common stock as quantum of dividend amount is unknown.

11/15/17

Retained earnings Dr 150000 (0.75*200000)

Common stock dividend payable Cr 150000

11/30/17

Common stock dividend payable Dr 150000

Cash Cr 150000

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