Question

On January 1, Whispering Winds Corp. had 62,600 shares of no-par common stock issued and outstanding. The stock has a stated value of $4 per share. During the year, the following transactions occurred.

Apr. 1 Issued 16,650 additional shares of common stock for $13 per share.
June 15 Declared a cash dividend of $1.55 per share to stockholders of record on June 30.
July 10 Paid the $1.55 cash dividend.
Dec. 1 Issued 7,400 additional shares of common stock for $11 per share.
Dec. 15 Declared a cash dividend on outstanding shares of $1.65 per share to stockholders of record on December 31.

Required:

Prepare the entries, if any, on each of the three dates that involved dividends.

Answer 1

Step-by-step explanation:

The journal entries are shown below:

1. Cash Dividend A/c Dr $122,838 (62,600 + 16,650) × $1.55

To Dividend payable A/c $122,838

(Being the dividend is declared)

2. Dividend payable A/c $122,838

To Cash A/c $122,838

(Being the dividend is paid)

3. Cash Dividend A/c Dr $142,97 (62,600 + 16,650 + 7,400) × $1.65

To Dividend payable A/c $142,973

(Bring dividend is recorded)