Question

On March 15, American Eagle declares a quarterly cash dividend of $0.075 per share payable on April 13 to all stockholders of record on March 30.Required: Record American Eagle s declaration and payment of cash dividends for its 220 million shares.

Answer 1

Answer:

The Journal entries are as follows:

(i) On March 15,

Dividend [0.075×220,000,000] A/c    Dr. $16,500,000

To dividend payable                                                         $16,500,000

(To record the declaration of cash dividends)

(ii) On March 30,

No Journal entry required

(iii) On April 13,

Dividend payable A/c   Dr. $16,500,000

To cash                                                       $16,500,000

(To record the payment of cash dividends for its 220 million shares)