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20 August, 21:42

Marigold Corp. has 7,800 shares of common stock outstanding. It declares a $1 per share cash dividend on November 1 to stockholders of record on December 1. The dividend is paid on December 31. Prepare the entries on the appropriate dates to record the declaration and payment of the cash dividend

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  1. 20 August, 21:44
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    November 1

    Dividend $7,800 (debit)

    Shareholders for Dividends $7,800 (credit)

    December 31

    Shareholders for Dividends $7,800 (debit)

    Cash $7,800 (credit)

    Explanation:

    November 1

    Dividend $7,800 (debit)

    Shareholders for Dividends $7,800 (credit)

    Recognize an Equity Item - Dividend and also recognize a liability - Shareholders for Dividends

    December 31

    Shareholders for Dividends $7,800 (debit)

    Cash $7,800 (credit)

    De-recognize the Liability-Shareholders for Dividends and also de-recognize the Cash Asset
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