On January 31, 2016, Charlie Company paid employees $6,500 for January wages earned. Prepare the general journal entry (without explanation) needed. If no entry is required then write "No Entry Required."

Jan, 31

DR Wages and Salaries Expense $6,500

CR Cash $6,500

( To record wages paid to employees)

Wages are expenses and so are debited when they increase.

Cash was used to pay the wages therefore it decreased and as an asset it is to be credited when it decreases.

Since the preferred dividends are cumulative, any dividends not paid last year will be paid this year before any common dividends are paid.

Preferred dividends = 10,000 x $20 x 7% x 2 = $28,000

Dividends per preferred stock = $28,000 / 10,000 = $2.80

Common stocks dividends = $50,000 - $28,000 = $22,000

Dividends per common stock = $22,000 / 90,000 = $0.24