The shareholders' equity section of Winters Company contained the following balances as of December 31, 2010:
On September 26,2011, Winters issued 200 shares of its 10 percent preferred stock at $23 per share. On December 2, the company declared a cash dividend of $1,050, which was paid on December 27. Winters did not declare or pay any dividends during 2010. If Winters uses a separate dividend account for each type of stock, which of the following would be included in the journal entry to record the declaration of the 10% Preferred stock dividend?
a. a credit to 10% Preferred Cash Dividend for $600.
b. a debit to Dividend Expense for $600.
c. a credit to Dividends Payable for $600.
d. a debit to Cash for $600.

Question

The shareholders' equity section of Winters Company contained the following balances as of December 31, 2010:
  On September 26,2011, Winters issued 200 shares of its 10 percent preferred stock at $23 per share. On December 2, the company declared a cash dividend of $1,050, which was paid on December 27. Winters did not declare or pay any dividends during 2010. If Winters uses a separate dividend account for each type of stock, which of the following would be included in the journal entry to record the declaration of the 10% Preferred stock dividend? 
a. a credit to 10% Preferred Cash Dividend for $600.
b. a debit to Dividend Expense for $600.
c. a credit to Dividends Payable for $600.
d. a debit to Cash for $600.

Quizplus · Accepted Answer

The Answer of The shareholders' equity section of Winters Company contained the following balances as of December 31, 2010:
  On September 26,2011, Winters issued 200 shares of its 10 percent preferred stock at $23 per share. On December 2, the company declared a cash dividend of $1,050, which was paid on December 27. Winters did not declare or pay any dividends during 2010. If Winters uses a separate dividend account for each type of stock, which of the following would be included in the journal entry to record the declaration of the 10% Preferred stock dividend? 
a. a credit to 10% Preferred Cash Dividend for $600.
b. a debit to Dividend Expense for $600.
c. a credit to Dividends Payable for $600.
d. a debit to Cash for $600.

The Shareholders' Equity Section of Winters Company Contained the Following