On November 1, 2018, Nada, Inc. declared a dividend of $5.00 per share on common stock. Nada, Inc. has 20,000 shares of common stock outstanding and no preferred stock. The date of record is November 15, and the payment date is November 30, 2018. Which of the following is the journal entry needed on November 30, 2018? A. Debit Cash Dividends $100,000, and credit Dividends Payablelong dashCommon $100,000. B. Debit Cash Dividends $100,000, and credit Cash $100,000. C. Debit Cash $100,000, and credit Dividends Payablelong dashCommon $100,000. D. Debit Dividends Payablelong dashCommon $100,000, and credit Cash $100,000.

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Business

Grizzly

26 March, 13:51

On November 1, 2018, Nada, Inc. declared a dividend of $5.00 per share on common stock. Nada, Inc. has 20,000 shares of common stock outstanding and no preferred stock. The date of record is November 15, and the payment date is November 30, 2018. Which of the following is the journal entry needed on November 30, 2018? A. Debit Cash Dividends $100,000, and credit Dividends Payablelong dashCommon $100,000. B. Debit Cash Dividends $100,000, and credit Cash $100,000. C. Debit Cash $100,000, and credit Dividends Payablelong dashCommon $100,000. D. Debit Dividends Payablelong dashCommon $100,000, and credit Cash $100,000.

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Elyse Schroeder · Answer 1

D. Debit Dividends Payable Common Stock $100,000, and credit Cash $100,000

Explanation:

Since the record date is November 15, 2018, the liability to pay dividend is created on the same day.

On that date entry will be Cash Dividend A/c Debit and Dividend Payable A/c credit.

On that final date of payment of dividend payable liability will be settled by cash payment, by debiting dividend payable and crediting cash account.

Final Answer

D. Debit Dividends Payable Common Stock $100,000, and credit Cash $100,000