Question

Desert Apparel has 5,000 shares of common stock outstanding. On April 1, the company declares a $4 per share dividend to stockholders of record on April 15. The dividend is paid on April 30.

Record all necessary entries on the appropriate dates for cash dividends. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

1.Record the declaration of Cash dividend of $4 per share to stockholders recorded on April 15.
2.Record Entry on April 15.
3.Record the cash dividend paid.

Answer 1

April 1 Dividends $20,000

Dividends Payable Account $20,000

Step-by-step explanation:

The question is to make appropriate journal entries for Desert Apparel's transactions within the month of April

This is done as follows:

Date Journal Description Debit Credit

April 1 Dividends $20,000

Dividends Payable Account $20,000

Being the record of dividend payable to stockholders

April 15 No journal entry is required

April 30 Dividends Payable Account $20,000

Cash Account $20,000

Being the record of payment of the dividend on shares to shareholders

Note: Dividend amount = 5,000 shares x $4 = $20,000