A company declared a $0.50 per share cash dividend. The company has 260,000 shar

Question

A company declared a $0.50 per share cash dividend. The company has 260,000 shares authorized, 247.000 shares Issued, and 10,400 shares In treasury stock. The Journal entry to record the dividend declaration is: Debit Retained Earnings $123,500; credit Common Dividends Payable $123,500. Debit Common Dividends Payable $123,500; credit Cash $123,500. O Debit Retained Earnings $130,000; credit Common Dividends Payable $130,000. Debit Retained Earnings $118,300; credit Common Dividends Payable $118,300. Debit Common Dividends Payable $118,300; credit Cash $118,300.

Explanation / Answer

Answer is 'Debit Retained Earnings $118,300; Credit Common Dividends Payable $118,300

Dividend amount is 0.50*(247000-10400) = 118,300

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