Question

On March 15, Summit Hawk declares a quarterly cash dividend of $0.085 per share payable on April 13 to all stockholders of record on March 30. Required: Record Summit Hawk's declaration and payment of cash dividends for its 218 million shares.

Answer 1

The journal entries to  Summit Hawk's declaration and payment of cash dividends is: Debit Dividend  $18,530,000; Credit  Dividend payable   $18,530,000

Journal entries

March 15

Debit Dividend  $18,530,000

(218,000,000 shares × $0.085)

Credit  Dividend payable   $18,530,000

(To record cash dividend declaration)  

March 30

No entry

April 13

Debit Dividend payable     $18,530,000

(218,000,000 shares × $0.085)

Credit  Cash     $18,530,000

(To record payment of cash dividend)

Therefore the journal entries to  Summit Hawk's declaration and payment of cash dividends is: Debit Dividend  $18,530,000; Credit  Dividend payable   $18,530,000.

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