Question

on january 1 ripken corporation had 80000 shares of 10 par value common stock outstanding. on may 7 the company declared a 10 stock divident to stockholders of record may 21 the market value of the stock was 13 on may 7 the entry to record the transaction of may 7 would include a

Answer 1

Debit : Dividend $8,000

Credit : Shareholders for dividends $8,000

Step-by-step explanation:

We recognize equity item - dividend and a liability - shareholders for dividend on declaration date.

Dividend = 80000 shares x $10 x 10% = $8,000