**Educational Resource: Accounting for Cash Dividends****Topic: Journalizing Cash Dividends**When dealing with cash dividends, it's essential for students to understand the critical dates and the corresponding journal entries involved in the process. Below is an example to illustrate.### Dividend Dates and Journalization**Scenario:**A corporation has declared a cash dividend of $108,000 on its common stock. The important dates for this dividend are:- **Declaration Date:** July 9- **Record Date:** August 31- **Payment Date:** October 1**Instructions:**Journalize the necessary entries for each date. If no journal entry is required for a specific date, move on to the next transaction. Refer to the Chart of Accounts for the precise wording of account titles.### Dates and Their Journal Entries**1. Declaration Date (July 9):**This is the date on which the board of directors formally announces the dividend. _**Journal Entry:**_```plaintext Date: July 9 Debit: Retained Earnings $108,000 Credit: Dividends Payable $108,000 (To record the declaration of cash dividends)```**2. Record Date (August 31):**This date is when the corporation determines the shareholders eligible to receive the dividend. No journal entry is needed on this date._**Journal Entry:**_```plaintext No entry required.```**3. Payment Date (October 1):**This is the date on which the dividend is actually paid to the shareholders._**Journal Entry:**_```plaintext Date: October 1 Debit: Dividends Payable $108,000 Credit: Cash $108,000 (To record payment of cash dividends)```**Conclusion:**By understanding these dates and their corresponding entries, students will be able to accurately handle the accounting for cash dividends. Remember, always consult the Chart of Accounts to ensure the correct account titles are used.

Dividends are the part or share of profits that is being distributed to the shareholders of the…

The declaration, record, and payment dates in connection with a cash dividend of $108,000 on a corporation's common stock are July 9, August 31, and October 1. Journalize the entries required on each date. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles.

The declaration, record, and payment dates in connection with a cash dividend of $108,000 on a corporation's common stock are July 9, August 31, and October 1. Journalize the entries required on each date. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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