Question

The board of directors of Capstone Inc. declared a $0.60 per share cash dividend on its $1 par common stock. On the date of declaration, there were 54,000 shares authorized, 15,000 shares issued, and 4,000 shares held as treasury stock. What is the entry when the dividends are declared

Answer 1

DR Dividends $6,600

CR Dividends Payable $6,600

Step-by-step explanation:

Out of 54,000 shares, 15,000 are issued. Of those 15,000, 4,000 are held as Treasury stock.

Dividends will be;

= (15,000 - 4,000) * $0.6

= $6,600