Question

On September 18th, 2019 Microsoft Corp. announced that its board of directors declared a quarterly dividend of $0.51 per share, reflecting a 5 cent or 11% increase over the previous quarter's dividend. The dividend is payable Dec. 12, 2019, to shareholders of record on Nov. 21, 2019. Microsoft has 7.71B shares outstanding. What is the journal entry Microsoft records on September 18th, 2019

Answer 1

Answer and Explanation:

The Journal entry is shown below:-

Retained earning Dr, $3.932 B

To Dividends payable $3.932 B

(Being dividend declared is recorded)

Working Note

Retained earning = 7.71 B × $0.51

= $3.932 B

Therefore for recording the dividend declared we simply debited the retained earning and credited the dividend payable.