Dividend journal entry

KAT4 · #1 Feb 8, 2007, 03:03 PM

Can someone please help me with this journal entry:

The company declared and distributed cash dividend totaling $6,000 to its shareholders.

I think the journal entry is this, am I right?

Dividends declared 6,000
Cash 6,000

or is it

Dividends Payable 6,000
Cash 6,000

KongTheKonqueror · Feb 8, 2007, 05:25 PM

One the declared date it would be,
Dividends 6,000
Dividends Payable 6,000

When paid it would be,
Dividends Payable 6,000
Cash 6,000

Or if done on the same date it would only be,
Dividends 6,000
Cash 6,000

sajalarora · Feb 8, 2007, 11:04 PM

the proper treatment regarding dividend journal entries are as below:

at the time of dividend declared,

profit &loss appropriation a/c ......dr 6,000
to proposed dividend a/c 6,000
as dividend are first appropriated from the profit of the company.

at the time of dividend paid to shareholders

proposed dividend a/c......dr 6,000
to dividend a/c 6,000

dividend a/c .....dr 6,000
to cash a/c 6,000



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