Question

On November 1, the board of directors of Castle Industries declares a cash dividend of $1 per share on its 1 million shares, payable to shareholders of record November 15, to be paid December 1. The ex-dividend date is two days before the date of record. On which of the following dates will journal entries be recorded?

A.November 1
B.November 13
C.November 15
D. December 1

Answer 1

A.November 1

D. December 1

Step-by-step explanation:

Since in the question it is given that the on November 1, the company declared the cash dividend and for that the journal entry is to be passed and the dividend is to paid on December 1 and on this date also, the journal entry is required

Moreover, the date of record and the ex-dividend date, no journal entry is required

The journal entries are as follows

Retained earning A/c Dr XXXXX

To Dividend payable A/c XXXXX

(Being cash dividend declared)

Dividend payable A/c Dr XXXXX

To Cash A/c XXXXX

(Being the payment is made for cash)