Super Retail declared dividend $200000 and paid dividend $150000 on 30 June 2019.
Prepare journal entries.
Dividend Declaration and Payment:
The dividend is the term for the funds distributed from the earnings of the company. Although the total earnings of the company belong to the common stockholder, only a portion of these earnings are distributed as dividends, The remaining portion is retained for the business.
Answer and Explanation:
Journal entries in the books of accounts for dividend declaration and payment are as follows:
|Date||Account Title||Debit ($)||Credit ($)|
|June 30, 2019||Retained earnings||$200,000|
|(to record declaration of dividend)|
|June 30, 2019||Dividend payable||$150,000|
|(to record payment of dividend in cash)|
The closing balance in the dividends payable account will be $50,000 ($200,000 - $150,000)
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from Finance 101: Principles of FinanceChapter 16 / Lesson 1