The books of Conchita Corporation carried the following account balances as of December 31, 2014.
| Cash | $ 202,200 |
| Preferred Stock (6% cumulative, nonparticipating, $50 par) | 300,000 |
| Common Stock (no-par value, 298,900 shares issued) | 1,494,500 |
| Paid-in Capital in Excess of Par—Preferred Stock | 181,600 |
| Treasury Stock (common 3,000 shares at cost) | 37,600 |
| Retained Earnings | 121,200 |
The company decided not to pay any dividends in 2014.
The board of directors, at their annual meeting on December 21, 2015, declared the following: “The current year dividends shall be 6% on the preferred and $0.30 per share on the common. The dividends in arrears shall be paid by issuing 1,800 shares of treasury stock.” At the date of declaration, the preferred is selling at $85 per share, and the common at $10 per share. Net income for 2015 is estimated at $77,910.
(a) Prepare the journal entries required for the dividend declaration and payment, assuming that they occur simultaneously.
