Question

Entries for Cash Dividends The declaration, record, and payment dates in connection with a cash dividend of $49,000 on a corporation's common stock are February 1, March 18, and May 1. Journalize the entries required on each date. If no entry is required, select "No Entry Required" and leave the amount boxes blank. Feb. 1 Cash Dividends Cash Dividends Payable Mar. 18 May. 1

Answer 1

Journalizing the entries required on declaration, record and payment dates in connection with a cash dividend:

Date	General Journal	Debit	Credit
Feb1	Cash Dividends	$49000
	Cash Dividends payable		$49000
	(To record the declaration of dividends)
Mar18	No Entry
May1	Cash Dividends payable	$49000
	Cash		$49000
	(To record the payment of dividends)

- On the date of declaration, liability should be recorded by crediting 'Cash dividends payable account'

- No entry is need on the date of record

- On the date of payment, the liability has been discharged. So, the liability (cash dividend payable) has to be debited and cash should be credited as there is outflow of cash for dividend payment

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