On August 1, Hagino Corporation declared a $1.50 per share cash dividend on its common stock (20 comma 000 shares) for stockholders on record as of August 15. Hagino paid the dividend on August 31. Journalize the entries declaring the cash dividend and paying the dividend

The entries declaring the dividends are as follows:

Dr Retained earnings $30,000

Cr Dividends payable $30,000

Being declaration of $1.50 dividend per share

The entries upon payment of dividends:

Dr Dividends payable $30,000

Cr Cash $30,000

Being payment of dividends

Explanation:

The actual dividends declared is $30,000 ($1.5*20000 shares)

Upon declaration of the dividends the retained earnings is debited with $30,000 as the dividends are taken from retained profits in the business, with the obligation of dividends credited to dividends payable account,

Upon, dividends payable account is debited and actual outflow of cash is credited to cash account.