# Nutritious Pet Food Company’s board of directors declares a cash dividend of $1.00 per common share on November 12. On this date, the company has issued 12,000 shares but 2,000 shares are held as treasury shares. The company pays the dividend on December 14. What is the journal entry to record the payment of the dividend? FindFindarrow_forward ### Principles of Accounting Volume 1 19th Edition OpenStax Publisher: OpenStax College ISBN: 9781947172685 #### Solutions Chapter Section FindFindarrow_forward ### Principles of Accounting Volume 1 19th Edition OpenStax Publisher: OpenStax College ISBN: 9781947172685 Chapter 14, Problem 11EA Textbook Problem 1 views ## Nutritious Pet Food Company’s board of directors declares a cash dividend of$1.00 per common share on November 12. On this date, the company has issued 12,000 shares but 2,000 shares are held as treasury shares. The company pays the dividend on December 14. What is the journal entry to record the payment of the dividend?

To determine

To journalize:

The transactions relating to declaration of dividend.

Introduction:

Profits of the company are distributed as dividends to the stockholders of the company. Dividends can be distributed in the form of cash, stock, or property.

### Explanation of Solution

Record declaration of dividend:

 Date Account Title and Explanation Post Ref. Debit ($) Credit($) November,12 Retained Earnings1 ($1×10,000) 10,000 Cash Dividends Payable 10,000 (To record declaration of cash dividend.) Table (1) • Retained Earnings is income and it is decreased by$10,000. Therefore, Retained Earnings is debited with $10,000. • Cash Dividends Payable is a liability and it is increased by$10,000. Therefore, Cash Dividends Payable is credited with \$10,000.

Record payment of dividend:

 Date Account Title and Explanation Post Ref

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