Question

declared a $0.70 per share cash dividend on its $1 par common stock. On the date of declaration, there were 50,000 shares authorized, 14,000 shares issued, and 5,600 shares held as treasury stock. What is the entry for the dividend declaration

Answer 1

Debit Retained Earnings $5,880; credit Common Dividends Payable $5,880.

Step-by-step explanation:

Based on the information given the appropriate

Journal entry for the dividend declaration will be:

Debit Retained Earnings $5,880

Credit Common Dividends Payable $5,880.

(To record dividend declaration)

$0.70 * (14,000 shares - 5600 shares)

= $0.70*8,400

=$5,880