Question

Concord Corporation has 8,800 shares of common stock outstanding. It declares a $3 per share cash dividend on November 1 to stockholders of record on December 1. The dividend is paid on December 31. Prepare the entries on the appropriate dates to record the declaration and payment of the cash dividend

Answer 1

Declaration date:

Dr retained earnings $26400

Cr dividends payable $26400

Payment date:

Dr dividends payable $26400

Cr Cash $26400

Step-by-step explanation:

Total dividend declared is the number of shares multiplied by cash dividend per share

total dividend=$3*8,800=$26400

On the record date no entries are required since record date, is just about verifying the bonafide shareholders.

On declaration date,dividends payable would be credited with $26,400 while retained earnings is debited.

On payment date,dividends payable is debited and cash credited