Question

"On May 15, Canadian Falcon declared a quarterly cash dividend of $0.15 per share, payable on June 10 to all stockholders of record on May 31. Provide the necessary journal entries for the declaration of cash dividends of $0.15 per share for stockholders of record on May 31.

Answer 1

To declare cash dividends, a company debits the dividends payable account and credits the dividends declared account. To pay the dividends, the company debits the dividends payable account and credits the cash account.

Step-by-step explanation:

Journal Entries:

Declaration of Dividends:

Debit: Dividends Payable $0.15 per share x Number of Outstanding Shares

Credit: Dividends Declared $0.15 per share x Number of Outstanding Shares

Payment of Dividends:

Debit: Dividends Payable

Credit: Cash

To record the declaration of cash dividends, the company will debit the dividends payable account and credit the dividends declared account, both recorded at the amount per share multiplied by the number of outstanding shares. To record the payment of dividends, the company will debit the dividends payable account and credit the cash account.