Another Journal entries question! On May 20, the board of directors for Auction.

Question

Another Journal entries question! On May 20, the board of directors for Auction.com declared a cash dividend of 50 cents per share payable to stockholders of record on June 14. The dividends are paid on July 14. The company has 513,000 shares of stock outstanding. Closing entries are recorded on July 31. Prepare any necessary journal entries for each date. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

A) May 20th, Record the entry on the date of declaration for a cash dividend of 50 cents per share payable on the 513,000 shares of stock outstanding.

B) June 14th, Record the entry on the date of record for a cash dividend of 50 cents per share payable on the 513,000 shares of stock outstanding.

C) July 14th, Record the entry on the date of payment for the cash dividend.

D) July 31st, Record the entry to close the dividend account to retained earnings.

Explanation / Answer

A) 1 cent = $0.01

50 cents = 50x0.01 = $0.5

Date Particulars Amount($) Amount($) MAy 20 Retained Earnings (513000x0.5) $256500 To Dividend PAyable $256500 (Being Dividend Declared) B) June 14 Retained Earnings (513000x0.5) $256500 To Dividend payable $256500 (Being cash dividend recorded)    C) july 14 Dividend Payable A/c Dr $256500 To CAsh $256500 (Being Dividend paid D) July 31 Retained Earnings A/c Dr $256500 To Dividend A/c $256500 being Dividend A/c Closed to retained Earnings

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