Accounting: Stockholders' Equity in a B/S?

Question: Given this:
2004 - Common Stock of $2 par value; 200,000 authorised, 100,000 shares issued
2005 - Preferred Stock of 8%, $100 par value; 5,000 authorised and issued (Cummulative)
2006 - Preferred Stock no par, dividend at $9 per share

The company declared no dividends in 2004 and 2005. Dividends of 50 cents per share in 2006 and $1.60 per share in 2007 were paid on the common stock.

How do I account for the dividends? I thought dividends must be paid to the preferred shareholders' first? Why does the question state that the dividends are paid on the common stock? If that's the case, how do I account for the dividends for the preferred shareholders?

Thanks for yr help

Answer:
DO YOUR OWN HOMEWORK!

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