Ask Experts Questions for FREE Help !
Ask
    Cynthialee45's Avatar
    Cynthialee45 Posts: 5, Reputation: 1
    New Member
    		  
    #1

    May 28, 2007, 12:54 PM
    Journal entry regarding declared dividends
    The Board of Directors declared a $2.25 per share dividend on the 3,000 shares of $75 par value common stock outstanding. The dividends will be payable on January 31 2006 to all stockholders of record as of January 25.

    This entry made as of Dec. 30

    DR. Dividends Declared $6,750
    CR. Dividends Payable $6,750.

    Is it correct? Is it complete? I don't really understand what to do with the $75 par value common stock outstanding part.

    Help is much appreciated
    manik chand dey's Avatar
    manik chand dey Posts: 63, Reputation: 2
    Junior Member
    		  
    #2

    Oct 4, 2008, 12:12 AM

    yes it is right and only applicable for cash dividend. We donot need to take $75, the par value into consideration because dividend is always paid on the par value of the stock. So in any case the company's cash outgo will be $6750.

    At the time of payment, that is on the payment date(January 31 2006),dividend payable account will be debited and cash account will be credited.
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Journal Entry [ 3 Answers ]

On 12/31 the company signs a lease for new office space , and pays for the first three months rent (Jan-Mar) The amount is 4500. Do I do a journal entry for that

Journal Entry [ 3 Answers ]

On dec 31st company determines that bad debts are expected to total $2000. Need journal entry

Journal Entry [ 1 Answers ]

10 investors contribute $2500 each in order to start a new business venture. Each will receive 1000 shares of stock. Can't figure out journal entry

Declared vs. Paid Dividends [ 1 Answers ]

Are common stock dividends declared just prior to the end of a FY (06), but actually paid early in the following FY (07), included in the total amount of dividends "paid" during that FY (06)? Or, like I suspect, are they truly considered "paid" in the following FY (07) total? Thanks!

Dividends declared [ 0 Answers ]

If a company lists a debit to dividends declared on their trial balance as an expense , how would this effect stockholders equity at period end? I do not think it would not be an adjusting entry to remove from expenses, but a reclassification entry but I am unsure of what entry to make:confused:

View more questions Search