On May 20, the board of directors for Auction.com declared a cash dividend of 50

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 507,000 shares of stock outstzandinClosing tries are recorded on Jluy31.lepare anyuemesen rrearedr in the each date. (f no entry is required for a transaction/event, select '"No Journal Entry Required first account field.) necessary journal entries for View transaction list Journal entry worksheet 2 4 Record the entry on the date of declaration for a cash dividend of 50 cents per share payable on the 507,000 shares of stock outstanding. Note: Enter debits before credits. Date General Journal Debit Credit May 20 Record enty Clear entry View general journal

Explanation / Answer

Date Explanation Debit Credit May 20 Cash dividend (507,000 shares×$0.50) $ 253,500            Cash dividend payable $ 253,500 (To record the declaration of cash dividend) June 14 No journal entry is required July 14 Cash dividend payable $ 253,500            Cash $ 253,500 (To record the payment of cash dividend) July 31 Retained earnings $ 253,500            Cash dividend $ 253,500 (To close dividend account to retained earnings account)

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