Question

Fetzer Company declared a $0.50 per share cash dividend. The company has 460,000 shares authorized, 437,000 shares issued, and 18,400 shares in treasury stock. The journal entry to record the payment of the dividend is:

Answer 1

Answer: The journal entry to record the payment of the dividend will be to debit the common dividend payable by $209,300 and credit cash by $209,300.

Explanation:

From the question, we are told that Fetzer Company declared a $0.50 per share cash dividend and that the company has 460,000 shares authorized, 437,000 shares issued, and 18,400 shares in treasury stock

Based on the above scenario, the dividend payable will be:

= (437,000 - 18,400) × $0.50

= 418,600 × $0.50

= $209,300

Therefore, the journal entry to record the payment of the dividend will be to debit the common dividend payable by $209,300 and credit cash by $209,300.