Caesar's Coffee Co. declared its annual cash dividend on its 3% preferred stock (total par value $90,000)and a $0.25 per share cash dividend on its common stock (50,000 shares outstanding). The journal entry for the declaration date is:

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The total amount of the preferred stock dividend is $2,700 ($90,000 x 3%), and the total amount of the common stock dividend is $12,500 ($0.25 x 50,000). The total amount of the dividends to be paid is $15,200 ($2,700 + $12,500). The journal entry to record the declaration of the dividends on the declaration date is to debit Retained Earnings for $15,200 and credit Dividends Payable - Preferred for $2,700 and Dividends Payable - Common for $12,500. Therefore, the correct answer is D.