The journal entry to record the declaration of dividends on common stock includes a debit to either Dividends or Retained Earnings and a credit to Common Dividend Payable.

Question

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When declaring dividends on common stock, the journal entry would include a debit to Retained Earnings (or Dividends if Retained Earnings is not used) and a credit to Common Dividend Payable.

The Journal Entry to Record the Declaration of Dividends on Common