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On July 15, 2015, the board of directors of George Easton Limited declared a cash dividend of $0.50 per share on 84,000 common shares.The dividend is to be paid on August 15, 2015, to shareholders of record on July 31, 2015.
-The correct entry to be recorded on August 15, 2015 will include a
A)debit to Cash Dividends.
B)credit to Retained Earnings.
C)credit to Dividends Payable.
D)debit to Dividends Payable.

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On July 15, 2015, the board of directors of George Easton Limited declared a cash dividend of $0.50 per share on 84,000 common shares.The dividend is to be paid on August 15, 2015, to shareholders of record on July 31, 2015.
-The correct entry to be recorded on August 15, 2015 will include a
A)debit to Cash Dividends.
B)credit to Retained Earnings.
C)credit to Dividends Payable.
D)debit to Dividends Payable.

Quizplus · Accepted Answer

Since the dividend is being paid on August 15, 2015, a debit to Dividends Payable is required in order to reduce the liability for the amount of the dividend that will be paid to shareholders.

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