Question

Concord Corporation has 10.40 million shares of common stock issued and outstanding. On June 1, the board of directors voted an 74 cents per share cash dividend to stockholders of record as of June 14, payable June 30.

Prepare the journal entries for each of the dates above assuming the dividend represents a distribution of earnings. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

How would the entries differ if the dividend were a liquidating dividend? (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Answer 1

Journal Entries:

a. Journal Entries Dividends represents distribution earnings
Date	General Journal	Date	Credit
Jun-01	Retained Earnings(10.4Million*74%)	$7696000
	Dividends Payable		$7696000
Jun-14	No Entry
Jun-30	Dividends payable	$7696000
	Cash		$7696000
b. If Dividends were a Liquidating Dividend
Date	General Journal	Date	Credit
	Paid In Capital - Equity	$7696000
	Dividends payable		$7696000