Problem

(L.OBJ. 4, 5) Accounting for cash dividends [10 min] Greentea Company earned net income...

(L.OBJ. 4, 5) Accounting for cash dividends [10 min]

Greentea Company earned net income of $800,000 during the year ended December 31, 2010. On December 15, Greentea declared the annual cash dividend on its 2% preferred stock (par value, $110,000) and a $1.00 per share cash dividend on. its common stock (65,000 shares). Greentea then paid the dividends on January 4, 2011.

Requirement

1. Journalize for Greentea:

a. Declaring the cash dividends on December 15, 2010.

b. Paying the cash dividends an January 4, 2011.

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