Question

Woolford Inc. declared a cash dividend of $1.00 per share on its 2 million outstanding shares. The dividend was declared on August 1, payable on September 9 to all stockholders of record on August 15.Prepare all journal entries necessary on those three dates. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Answer 1

Answer:

August 1st and September 9th have entries but August 15th will not have any journal records.

Explanation:

The question is to prepare the journal entries for the three dates

August 1: Declared Cash Dividend of $1.00 per share on its 2 million outstanding shares.

Date                    Particulars                              Debit            Credit

August 1             Retained Earnings A/c       $2,000,000

                          Dividend Payable A/c                                $2,000,000

being the record of dividend declared on 2 million outstanding shares.

August 15: All stakeholders on record by August 15 are entitled to dividend.

Date                    Particulars                              Debit            Credit

August 15            No Entries (Just a record of stakeholders on this date)

September 9: Dividend Paid

Date                    Particulars                              Debit            Credit

August 1             Dividend Payable A/c       $2,000,000

                        Cash Account                                           $2,000,000

Being the record of dividend paid of $1 for 2000000 outstanding shares.