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3 June, 08:00

On January 1, Whispering Winds Corp. had 62,600 shares of no-par common stock issued and outstanding. The stock has a stated value of $4 per share. During the year, the following transactions occurred.

Apr. 1 Issued 16,650 additional shares of common stock for $13 per share.

June 15 Declared a cash dividend of $1.55 per share to stockholders of record on June 30.

July 10 Paid the $1.55 cash dividend.

Dec. 1 Issued 7,400 additional shares of common stock for $11 per share.

Dec. 15 Declared a cash dividend on outstanding shares of $1.65 per share to stockholders of record on December 31.

Required:

Prepare the entries, if any, on each of the three dates that involved dividends.

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Answers (1)
  1. 3 June, 08:27
    0
    The journal entries are shown below:

    1. Cash Dividend A/c Dr $122,838 (62,600 + 16,650) * $1.55

    To Dividend payable A/c $122,838

    (Being the dividend is declared)

    2. Dividend payable A/c $122,838

    To Cash A/c $122,838

    (Being the dividend is paid)

    3. Cash Dividend A/c Dr $142,97 (62,600 + 16,650 + 7,400) * $1.65

    To Dividend payable A/c $142,973

    (Bring dividend is recorded)
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