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Desert Apparel has 5,000 shares of common stock outstanding. On April 1, the company declares a $4 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 transaction/event, select "No journal entry required" in the first account field.)

1.Record the declaration of Cash dividend of $4 per share to stockholders recorded on April 15.
2.Record Entry on April 15.
3.Record the cash dividend paid.

Respuesta :

Answer:

April 1           Dividends                                        $20,000

                       Dividends Payable Account                                 $20,000

Explanation:

The question is to make appropriate journal entries for Desert Apparel's transactions within the month of April

This is done as follows:

Date                Journal Description                      Debit               Credit

April 1           Dividends                                        $20,000

                       Dividends Payable Account                                 $20,000

Being the record of dividend payable to stockholders

April 15            No journal entry is required

April 30          Dividends Payable Account         $20,000

                           Cash Account                                                     $20,000

Being the record of  payment of the dividend on shares to shareholders

Note: Dividend amount = 5,000 shares x $4 = $20,000

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