Question

A company paid Jen Rogers, its sole stockholder, a total of $21,000 in dividends during the current year. The entry needed to close the dividends account is:

Answer 1

Answer and Explanation:

The journal entry to required the closing of the dividend account is shown below:

Retained earnings $21,000

To Dividends $21,000

(Being the closing of the dividend is recorded)

Here the retained earning is debited as it decreased the equity and the dividend is credited as it reduced the dividend