Question

The declaration, record, and payment dates in connection with a cash dividend of $56,300 on a corporation's common stock are January 12, March 13, and April 12. Journalize the entries required on each date.
If no entry is required, select "No entry required" and leave the amount boxes blank.

Answer 1

Answer:

The double entries required for the dividends are itemized below:

Jan.12 (Declaration date)

DR Retained earnings  $56,300

CR Dividends payable                 $56,300

Mar.13( Record date) no entry is required.

Apr.12(Payment date)

DR Dividends payable $56,300

CR Cash                                        $56,300

Explanation:

On the declaration date,entry is required to show that the company has an obligation to pay dividends to shareholders by crediting dividends payable account and debiting retained earnings(since dividends are paid from accumulated earnings of the business)

On the date the dividends are recorded, no entry is required because that  is just a mere record filling.

Lastly,when the dividends are paid, actual movement of cash should be recognized in the books by debiting dividends payable account while crediting cash account.