On March 15, American Eagle declares a quarterly cash dividend of $0.045 per share payable on April 13 to all stockholders of record on March 30.

Required:

Record American Eagle's declaration and payment of cash dividends for its 226 million shares. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions (i. e. $5.5 should be entered as 5,500,000).)

Answer and Explanation:

The journal entries are shown below:

On March 15

Dividend Dr $10,170,000 (226 million shares * $0.045 per share)

To Dividend payable $10,170,000

(Being the dividend is declared)

For recording this we debited the dividend as it increased the balance of dividend and credited the dividend payable as it increased the liabilities

On March 30

No journal entry is required for recording of dividend

On April 13

Dividend payable $10,170,000

To cash $10,170,000

For recording this we debited the dividend payable as it decreased the liabilities and credited the cash as it reduced the assets

(Being the dividend payable is recorded)