Answer:
June 15 - Declared a cash dividend of $1 per share
Debit : Dividends $120,000
Credit : Dividends for Shareholders $120,000
July 10 - Paid the $1 cash dividend
Debit : Dividends for Shareholders $120,000
Credit : Cash $120,000
Dec 15 - Declared a cash dividend
Debit : Dividends $595,350
Credit : Dividends for Shareholders $595,350
Explanation:
When a dividend is declared, raise a Liability - Shareholders for Dividends and an Equity item - Dividends.
When the dividend is paid, de-recognize the Liability - Shareholders for Dividends and recognize a Cash Outflow.
<u><em>Dividends Calculations :</em></u>
June 15
Dividends = (97,500 + 22,500) x $1.00 = $120,000
Dec 15
Dividends = (97,500 + 22,500 + 1,500) x $4.90 = $595,350
