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

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.