Answer:
July 15
Debit: Retained Earnings $165,000
Credit: Cash Dividend Payable $165,000
Aug 15
No entry Required.
Aug 31
Debit: Cash Dividend Payable $165,000
Credit: Cash $165,000
Explanation:
The date of declaration is the date on which Board of Directors decides to pay the dividends to Stock Holders and the Liability is created.
On the other hand, Date of Record is merely decision made by Stock Holders on the amount announced on the date of declaration, that how this amount will be distributed among them, So there is no journal entry required on this date.
The date of payment is the date when the dividend liability is paid off to the stock holders, hence the contra entry is made in Dividends Payable Account to cancel out the transaction.
July 15
Debit: Retained Earnings $165,000
Credit: Cash Dividend Payable $165,000
<em>To record Cash Dividend of $165,000 Declared.</em>
Aug 15
The date of record is merely announcement of which stock holders receives dividends, so no entry required on this date.
Aug 31
Debit: Cash Dividend Payable $165,000
Credit: Cash $165,000
<em>To record payment of $165,000 Cash Dividend declared on July 15.</em>
