111-8 Recording Dividends [LO 11-3 n May 20, the board of directors for Auction.

Question

111-8 Recording Dividends [LO 11-3 n May 20, the board of directors for Auction.com declared a cash dividend of 50 cents per share payable to stockholders of record n June 14. The dividends are paid on July 14. The company has 508,000 shares of stock outstanding. Closing entries are recorded on uly 31. Prepare any necessary journal entries for each date. (If no entry is required for a transaction/event, select "No Journal Entry equired" in the first account field.) Record the entry on the date of declaration for a cash dividend of 50 cents per share payable on the 508,000 shares of stock outstanding 1 ents per Record the entry on the date of record for a cash dividend of 50 cents per share payable on the 508,000 shares of stock outstanding 2 3 Recond the entry on the date of payment for the cash dividend. 4 Record the entry to close the dividend account to retained earnings Note: journal entry has been entered Record entry ew general journal

Explanation / Answer

Journal entry :

Date account & explanation debit credit May 20 Cash dividend (508000*.50) 254000 Dividend payable 254000 (To record dividend declared) June 14 No entry July 14 Dividend payable 254000 Cash 254000 (To record dividend paid) July 31 Retained earnings 254000 Cash dividend 254000 (To record closing entry)

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