Fetzer Company declared a $0.25 per share cash dividend. The company has 160,000

Question

Fetzer Company declared a $0.25 per share cash dividend. The company has 160,000 shares authorized, 152,000 shares issued, and 6,400 shares in treasury stock. The journal entry to record the dividend declaration is:

Debit Common Dividends Payable $38,000; credit Cash $38,000.

Debit Retained Earnings $38,000; credit Common Dividends Payable $38,000.

Debit Retained Earnings $36,400; credit Common Dividends Payable $36,400.

Debit Retained Earnings $40,000; credit Common Dividends Payable $40,000.

Debit Common Dividends Payable $36,400; credit Cash $36,400.

Fetzer Company declared a $0.25 per share cash dividend. The company has 160,000 shares authorized, 152,000 shares issued, and 6,400 shares in treasury stock. The journal entry to record the dividend declaration is:

Explanation / Answer

Answer is C

General Journal Debit Credit Retained Earnings[$0.25 * (152,000 shares - 6,400 shares)] $36,400 Common Dividends Payable $36,400

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