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

Question

Business

Paddy

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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Keith Shepard · Answer 1

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