# Entries for cash dividends The declaration, record, and payment dates in connection with a cash dividend of \$480,000 on a corporation’s common stock are February 1, March 18, and May 1. Journalize the entries required on each date.

### Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

### Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

#### Solutions

Chapter
Section
Chapter 13, Problem 13.3BPE
Textbook Problem

## Entries for cash dividendsThe declaration, record, and payment dates in connection with a cash dividend of \$480,000 on a corporation’s common stock are February 1, March 18, and May 1. Journalize the entries required on each date.

Expert Solution
To determine

Cash dividends: The amount of cash provided by a corporation out of its distributable profits to its shareholders as a return for the amount invested by them is referred as cash dividends.

To journalize: The entries related to declaration, record, and payment of cash dividends.

### Explanation of Solution

Declaration date: The date on which the board of directors of a corporation announces officially to distribute the dividends to its shareholders is referred as declaration date.

February 1–Declaration Date:

Record the journal entry for the declaration of cash dividends.

 Date Account Titles and Explanation Post Ref. Debit (\$) Credit (\$) February 28 Cash Dividends 480,000 Cash Dividends Payable 480,000 (To record declaration of dividends)

Table (1)

• Cash Dividends is a temporary stockholders’ equity account. The account is debited as the cash dividends are declared and eventually be transferred to Retained Earnings account. Therefore, debit Cash Dividends account with \$480,000.
• Cash Dividends Payable is a liability account and the amount owed is increased. Therefore, credit Cash Dividends Payable account with \$480,000...

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