On March 15, American Eagle declares a quarterly cash dividend of $0.095 per share payable on April 13 to all stockholders of record on March 30.

Required:

Record American Eagle's declaration and payment of cash dividends for its 216 million shares. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answer in dollars, not in millions (i. e. $5.5 should be entered as 5,500,000).)

Question

Chace Melendez

Business

26 August, 03:57

On March 15, American Eagle declares a quarterly cash dividend of $0.095 per share payable on April 13 to all stockholders of record on March 30.

Required:

Record American Eagle's declaration and payment of cash dividends for its 216 million shares. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answer in dollars, not in millions (i. e. $5.5 should be entered as 5,500,000).)

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Answers (1)

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Joslyn Sawyer · Answer 1

March 15,

Dr. Dividend $20,520,000

Cr. Dividend Payable $20,520,000

April 13,

Dr. Dividend Payable $20,520,000

Cr. Cash $20,520,000

Explanation:

A dividend is announced and paid after some days, so the journal entries for both event will be recorded separately.

At The time of Declaration no payment is made, only a liability is created against the dividend payment.

Dividend Value = $0.095 x 216,000,000 shares = $20,520,000

Payment will be made by debiting the dividend payable account to adjust the liability account and Crediting cash for the payment of cash dividend.