Question

Recording Cash Dividends [LO 11-3 National Chocolate Corp. produces chocolate bars and snacks under the brand names Blast and Soothe. A press release contained the following information March 5-National Chocolate Corp. today announced that its Board of Directors has declared a special one-time" cash dividend of $1.20 per share on its 102,000 outstanding common shares. The dividend will be paid on April 29 to shareholders of record at the close of business on March 26. The Company's fiscal year will end April 30 Required 1. Prepare any journal entries that National Chocolate Corp. should make on the four dates mentioned in press release. (If no entry is required for a transaction/date, select "No Journal Entry Required" in the first account field.)

Answer 1

Answer and Explanation:

The journal entries are shown below:

On Mar-05

DIvidends $122,400 (102,000 shares × $1.20)

To Cash dividends payable $122,400

(Being declaration of the dividend is recorded)

On Mar-26

No entry should be recorded on the recording date

On Apr-29

Cash dividends payable $122,400

To Cash $122,400

(being payment of the cash dividend is recorded)

On Apr-30

Retained earnings $122,400

To Dividends $122,400

(Being closing of the dividend account is recorded)