Question

Hutter Corporation declared a $0.50 per share cash dividend on its common shares. The company has 45,000 shares authorized, 24,000 shares issued, and 18,000 shares of common stock outstanding. The journal entry to record the dividend declaration is:

Answer 1

Dr Retained Earnings $9,000

Cr Common Dividends Payable $9,000

Step-by-step explanation:

Preparation of Journal entry

Based on the information given we were told that the Corporation declared $0.50 per share cash dividend on their common shares in which 18,000 shares of the common stock is outstanding which means that the journal entry to record the dividend declaration is:

Dr Retained Earnings $9,000

Cr Common Dividends Payable $9,000

($0.50 * 18,000 shares = $4,600)