The declaration, record, and payment dates in connection with a cash dividend of $55,000 on a corporation's common stock are October 1, November 7, and December 15.

Question

Journalize the entries required on each date. If no entry is required, choose "No Entry Required" and leave the amount boxes blank. If an amount box does not require an entry, leave it blank.

DateAccountDebitCredit
Oct. 1

Nov. 7

Dec. 15

Answer 1

In your scenario, the corporation is declaring a cash dividend. Here are the journal entries for each of the specified dates:

1. October 1 (Declaration Date): This is when the dividend is declared, creating a liability for the corporation. The entry reflects an increase in dividends declared (equity account) and a corresponding increase in dividends payable (liability account).

   Journal Entry:

   Date: Oct. 1
   Account: Dividends Declared          Debit: $55,000
   Account: Dividends Payable            Credit: $55,000
   

2. November 7 (Record Date): On the record date, the corporation identifies the shareholders who will receive the dividend. There is no journal entry required on this date.

   Journal Entry:

   Date: Nov. 7
   Account: No Entry Required          Debit: 
   Account: No Entry Required          Credit: 
   

3. December 15 (Payment Date): This is the date when the dividend is actually paid to the shareholders. The entry reflects a decrease in cash (asset account) and a decrease in dividends payable (liability account).

   Journal Entry:

   Date: Dec. 15
   Account: Dividends Payable          Debit: $55,000
   Account: Cash                       Credit: $55,000
   

Summary of Journal Entries:

Date       Account                       Debit        Credit
Oct. 1     Dividends Declared           $55,000
           Dividends Payable                          $55,000
Nov. 7     No Entry Required                          
Dec. 15    Dividends Payable             $55,000
           Cash                                         $55,000

This captures the accounting flow for dividend declarations and payments correctly according to standard accounting practices.