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On July 15, 2012, 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, 2012, to shareholders of record on July 31, 2012.
-The correct entry to be recorded on August 15, 2012 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, 2012, 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, 2012, to shareholders of record on July 31, 2012.
-The correct entry to be recorded on August 15, 2012 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

On August 15, 2012, the company will pay the dividend, so the entry will include a debit to Dividends Payable to eliminate the liability recorded on the declaration date.

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