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26 February, 04:09

Castillo Services paid K. Castillo, the sole shareholder of Castillo Services, $6,200 in dividends during the current year. The entry to close the dividends account at the end of the year is: Multiple Choice a. Debit Dividends $6,200, credit Cash, $6,200 b. Debit Retained earmings $6,200, credit Salary Expense $6,200 c. Debit Retained earnings $6,200; credit Dividends $6,200 d. Debit Dividends $6,200; credit Retained earnings $6,200 e. Debit Income Summary $6,200; credit Retained earnings $6.200

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  1. 26 February, 08:09
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    c. Debit Retained earnings $6,200; credit Dividends $6,200

    Explanation:

    The journal entry to record the closing of the dividend account is as follows

    Retained earnings Dr $6,200

    To Dividend $6,200

    (Being dividend account is closed)

    While recording this given entry we debited the retained earning account and credited the dividend account so that the proper posting could be done
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