Madison Company Earned Net Income of $75,000 During the Year

question 151

Essay

Madison Company earned net income of $75,000 during the year ended December 31,2016.On December 20,Madison declared the annual cash dividend on its 8% preferred stock (par value,$150,000)and a $0.50 per share cash dividend on its common stock (45,000 shares).Madison then paid the dividends on January 10,2017.
Prepare the journal entries to record the declaration and the distribution of the dividends.Explanations are not required.

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Definitions:

Lateral Hypothalamus

A part of the hypothalamus in the brain that plays a significant role in controlling hunger and thirst.

Aphagia

The inability to swallow or eat, often resulting from psychological issues or physical obstructions in the eating pathway.

Lesions

are abnormal changes in tissue structure caused by disease or injury.

Glucostatic Theory

A theory suggesting that the body's regulation of blood glucose levels influences feelings of hunger and satiety, thereby controlling eating behavior.