Question

Divine Apparel has 3,200 shares of common stock outstanding. On October 1, the company declares a $0.25 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.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:

The Journal entries are as follows:

(i) On October 1,

Dividend declared A/c(3,200 × 0.25) Dr. $800

   To Dividend payable                                        $800

(To record the declaration of cash dividend)

(ii) On October 15,

No entry

(No entry on date of record because no transaction actually happened)

(iii) On October 31,

Dividends payable A/c Dr. $800

      To cash                                    $800

(To record the payment of cash dividends)