Question

Hutter Corporation declared a $0.50 per share cash dividend on its common shares. The company has 26,000 shares authorized, 12,600 shares issued, and 10,400 shares of common stock outstanding. The journal entry to record the dividend declaration is:

Answer 1

Dr Retained Earnings $5,200

Cr Common Dividends Payable $5,200.

Step-by-step explanation:

Preparation of Hutter Corporation journal entry to record the dividend declaration

Since we are told that the Corporation declared a $0.50 per share cash dividend on its common shares in which they had 10,400 as the shares of common stock outstanding. This means the journal entry to record the dividend declaration will be :

Dr Retained Earnings $5,200

Cr Common Dividends Payable $5,200.

(0.50 per share cash dividend ×10,400 shares of common stock outstanding)