Question

On November 1, 2018, Uno, Inc. declared a dividend of $4.50 per share. Uno, Inc. has 23,000 shares of common stock outstanding and no preferred stock. Which of the following is the journal entry needed to record the declaration of the dividend?
A. Debit Cash Dividends $103,500, and credit Cash $103,500
B. Debit Cash Dividends $103,500, and credit Dividends Payable-Common $103,500.
C. Debit Dividends Payable-Common $103,500, and credit Retained Earnings $103,500.
D. Debit Cash $103,500, and credit Dividends PayableCommon $103,500

Answer 1

Answer:

Option - B  is correct one.

Debit Cash Dividends $103,500, and credit Dividends Payable-Common $103,500.

Explanation:

Cash - Dividend ( expenses account) is debited and corresponding credit is given to dividends payable account. Since dividend is declared but not paid. Later Cash dividend (expenses account ) shall be closed by transfer to retained earnings account.