Question

Desert Apparel has 5,000 shares of common stock outstanding. On April 1, the company declares a $3 per share dividend to stockholders of record on April 15. The dividend is paid on April 30.

Record all necessary entries on the appropriate dates for cash dividends. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Ans.
No.	Date	General Journal	Debit	Credit
1	15 - April	Dividends	$15,000
		Dividends payable		$15,000
		(dividends declared)
2	15 - April	No entry required	-	-
3	30 - April	Dividends payable	$15,000
		Cash		$15,000
		(dividends paid)
	*Calculations and Explanations:
	*Dividends = Common stock outstanding * Dividends per share
		5,000 * $3
		$15,000
	*Retained earnings can also be debited for dividends declared.
	No journal entry is required to record the declaration of dividends.