Mozart & Company Issued 2,500 Shares of 5%, $60 Par $$\begin{array} { | l | r | r | } \hline \text { Dividends - Preferred } & 9,500 & \\\hline \text { Cash } & & 9,500 \\\hline\end{array}$$

Mozart & Company issued 2,500 shares of 5%, $60 par value, preferred stock for $190,000. The board of directors declared preferred dividends for one year on December 30, to be paid in January. What journal entry is necessary to record the declaration of dividends?

A) $$\begin{array} { | l | r | r | } \hline \text { Dividends - Preferred } & 9,500 & \\\hline \text { Cash } & & 9,500 \\\hline\end{array}$$
B) $$\begin{array} { | l | r | r | } \hline \text { Dividends } & 9,500 & \\\hline \text { Dividends Payable-Preferred } & & 9,500 \\\hline\end{array}$$
C) $$\begin{array} { | c | r | r | } \hline \text { Dividends - Preferred } & 7,500 & \\\hline \text { Cash } & & 7,500 \\\hline\end{array}$$
D) $$\begin{array} { | c | r | r | } \hline \text { Dividends - preferred } & 7,500 & \\\hline \text { Dividends payable-preferred } & & 7,500 \\\hline\end{array}$$