Molton Corporation had the following stock issued and outstanding at January 1, 2013:
1. 120,000 shares of $1 par common stock.
2. 10,000 shares of $100 par, 6 percent, noncumulative preferred stock.
On June 10, Molton Corporation declared the annual cash dividend on its 10,000 shares of preferred stock and a $1 per share dividend for the common shareholders. The dividends will be paid on July 1 to the shareholders of record on June 20.
a. Determine the total amount of dividends to be paid to the preferred shareholders and common shareholders.
b. Prepare general journal entries to record the declaration and payment of the cash dividends (be sure to date your entries).