fayettae
Jul 26, 2011, 10:31 AM
I'm having problems with recording cash dividends and stock dividends in the general journal. I can't decide if this is a cash or stock dividend. The following information is what the book gives me:
Preferred Stock (10%, $50 par value, 4,000 shares authorized)
Issued and Outstanding, 1,200 Shares $60,000
Paid-in Capital in Excess of Par Value—Preferred 1,200 $61,200
June 15 Declared a semiannual dividend of 5 percent on preferred stock, payable on July 15 to stockholders of record on June 30.
July 15 Paid the dividend on preferred stock.
I feel the answer I came up with is wrong. This is my answer:
June 15 Retained Earnings 12,000.00
Dividends Payable-Preferred 12,000.00
July 15 Dividends Payable-Preferred 12,000.00
Cash 12,000.00
Preferred Stock (10%, $50 par value, 4,000 shares authorized)
Issued and Outstanding, 1,200 Shares $60,000
Paid-in Capital in Excess of Par Value—Preferred 1,200 $61,200
June 15 Declared a semiannual dividend of 5 percent on preferred stock, payable on July 15 to stockholders of record on June 30.
July 15 Paid the dividend on preferred stock.
I feel the answer I came up with is wrong. This is my answer:
June 15 Retained Earnings 12,000.00
Dividends Payable-Preferred 12,000.00
July 15 Dividends Payable-Preferred 12,000.00
Cash 12,000.00