Exercise 2: Note Payable (6 Marks)

Turtle Island Tours is incorporated and has the following share capital:

Preferred shares, $2.70, unlimited shares authorized

7,000 shares issued and outstanding $ 210,000

Common Shares, unlimited shares authorized

20,000 shares authorized and outstanding $ 980,000

The board of directors declares a dividend of $48,900 on August 2.

1. Calculate the dividends that will be paid to the Common and Preferred shareholders
2. Show the Journal entry to record the Dividend liability.

Date	Account	DR	CR