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Chapter 13: Q4TI (page 693)

On August 1, Hagino Corporation declared a $1.50 per share cash dividend on its common stock (20,000 shares) for stockholders on record as of August 15. Hagino paid the dividend on August 31. Journalize the entries declaring the cash dividend and paying the dividend.

Short Answer

Expert verified

Aug 15- Retained Earnings debited by $30,000, and Common stock dividend payable credited by $30,000.

Aug 31- Common stock dividend payable debited by $30,000, and Cash credited by $30,000.

Step by step solution

01

Calculation of common stock dividend payable

CommonStockDividendPayable=NumberofShare脳ValuePerShare=20,000脳$1.50=$30,000

02

Journals-

Date

Transaction

Debit

Credit

Aug 15

Retained Earnings

$30,000

Common stock dividend payable

$30,000

To record dividend declared

Aug 31

Common stock dividend payable

$30,000

Cash

$30,000

To record dividend paid

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