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    sarahpollat's Avatar
    sarahpollat Posts: 6, Reputation: 1
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    #1

    Oct 16, 2012, 11:12 AM
    Journal entry for declaring a cash dividend payable
    The board of directors declared a $2.30 per-share cash dividend payable on January 14 to stockholders of record on December 26 (after purchases of stock).
    I am calculating 4,600 shares outstanding.

    Will the journal entry be:
    Dividends 10580.00
    Dividends Payable 10580.00
    Or
    Dividend 10580.00
    Dividend payable 10580.00

    Retained Earnings 10580.00
    Dividends 10580.00

    Also will this be recorded in the General Journal or a Special Journal?

    Pleas Help!
    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 173
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    #2

    Oct 16, 2012, 03:39 PM
    Dividends are paid out of retained earnings, the question is how you have structured your accounts, are you bringing to account a liability? Or recording the actual payment?
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