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 518,000 shares of stock outstanding. Closing entries are recorded on July 31. Prepare any necessary jounal entries for each date. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Record the entry on the date of declaration for a cash dividend of 50 cents per share payable on the 518,000 1 shares of stock outstanding. ents per Record the entry on the date of record for a cash dividend of 50 cents per share payable on the 518,000 shares of stock outstanding. 2 3 Record the entry on the date of payment for the cash dividend. Credit Record the entry to close the dividend account to retained earnings 4 Note:journal entry has been entered Record entry Clear entry View general journal

Explanation / Answer

SOLUTION

Date Account titles and Explanation Debit ($) Credit ($) May 20 Retained Earnings (518,000 * 0.50) 259,000 Dividend payables 259,000 (To record the declaration of dividends) June 14 No Entry required July 14 Dividends payable 259,000 Cash 259,000 (To record the payment of dividends)

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