Question

Prepare journal entries to record the above transactions for Emerson Corporation. (If no entry is required for a transaction/event. select "No journal entry required" in the first account field.) July 15 Declared a cash dividend payable to common stockholders of $167,000. Aug. 15 Date of record is August 15 for the cash dividend declared on July 15. Aug. 31 Paid the dividend declared on July 15.

Answer 1

1) Credit Date Jul. 15 Accounts Debit Retained Earnings $167,000 Dividend Payable (To record dividend declared) $167,000 Debit Credit Date Aug. 15 Accounts No Entry is required [It is just an information and so no entry is required on record date] (On record date) 3) Date Aug. 31 Accounts Debit Credit Dividend Payable $167,000 Cash $167,000 (To record payment of dividend declared already) NOTE: Cash dividend is nothing but distribution of firm's earnings to its common stock holders for a reporting period. When it is declared, firm's retained earnings will be decreased and payable liability is created on Jul. 15. When it is paid off on Aug. 31, payable liability is decreased and cash balance is also decreased.