Question

Divine Apparel has 3,100 shares of common stock outstanding. On October 1, the company declares a $0.75 per share dividend to stockholders of record on October 15. The dividend is paid on October 31. Record all transactions on the appropriate dates for cash dividends. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)1) Record the declaration of cash dividends.2) Record the entry on date of record.3) Record the payment of cash dividends

Answer 1

Answer:

1.

                                                                              Debit                         Credit

Retained Earnings ($0.75*3,100)                         $2,325

Dividend payable                                                                                    $2,325

2. "No Journal Entry Required"

3.

                                                                              Debit                         Credit

Dividend payable                                                 $2,325

Cash                                                                                                        $2,325

Explanation:

The following journal entries will be required to be made

1. Recording declaration of dividend

The Divine Apparel shall record the the following journal entry on October 1 in respect of dividend declared by it.

                                                                              Debit                         Credit

Retained Earnings ($0.75*3,100)                         $2,325

Dividend payable                                                                                    $2,325

2.Record the entry on date of record

"No Journal Entry Required"

3.Record the payment of cash dividends

The Divine Apparel shall record the the following journal entry on October 31 in respect of dividend paid by it.

                                                                              Debit                         Credit

Dividend payable                                                 $2,325

Cash                                                                                                        $2,325