Question

Corporation has 73,000 shares of common stock outstanding. It declares a $2 per share cash dividend on November 1 to stockholders of record on December 1. The dividend is paid on December 31. Prepare the entries on the appropriate dates to record the declaration and payment of the cash dividend

Answer 1

Answer: See explanation

Step-by-step explanation:

The entries to record the declaration and payment of the cash dividend will be:

Novemeber 1:

Debit Dividend expenses $146000

Credit Dividend payable $146000

(To record dividend payable liability)

December 1:

Debit Dividend payable $146000

Credit Cash $146000

(To record payment of dividend)

Note: Cash dividend was calculated as:

= 73000 × $2

= $146000