Jumpin-JehoSaphats is owned by Jessica Jean (JJ) Sam hats. Jessica wants to incorporate her business but is not sure of the differences between the current form of sole proprietorship and changing to a corporation. She has come to you to discuss the future of her company.
Over the past 6 years Jumpin-Jeho Sam hats has been expanding and raising additional capital. The company currently has 50,000 common shares issued and outstanding.
Four years ago the company issued 5,000 shares of 3% Cumulative Preferred Shares at $1000 par.
In year 1 $40,000 dividends were paid.
In year 2 the Board of Directors issued $75,000 dividends to be paid out.
Now in the fourth year, on March 6th the Board of Directors declared a dividend of $3 per common share to be paid on May 15th to owners of record on March 30th. Given this information determine the amount of dividends that must be paid out by the company and record all of the required journal entries to carry out the Board's Directive.