Question

Hutter corporation declared a $0.50 per share cash dividend on its common shares. the company has 25,000 shares authorized, 12,000 shares issued, and 10,000 shares of common stock outstanding. the journal entry to record the dividend declaration is:

Answer 1

25,000 shares authorized
12,000 shares issued
10,000 shares of common stock outstanding
0.50 per share cash dividend on its common stock outstanding

Declaration of dividends on its common shares.
10,000 * 0.50 = 5,000
                                           Debit        Credit
Retained Earnings                  5,000
             Dividends Payable                   5,000