Duke Corporation reports the following components of stockholders' equity on December 31,2013: In 2014,the following transactions affected its stockholders' equity accounts.
What is the journal entry required for the March 3 transaction?

Question

Duke Corporation reports the following components of stockholders' equity on December 31,2013:  In 2014,the following transactions affected its stockholders' equity accounts.
 What is the journal entry required for the March 3 transaction?

Quizplus · Accepted Answer

The transaction involves the declaration of a dividend on common stock. Therefore, the journal entry would be to debit retained earnings (to reduce the balance of earnings available for distribution) and credit dividends payable (to record the liability for the declared dividends). Choice C represents this entry.

Duke Corporation Reports the Following Components of Stockholders' Equity on December