On January 1, Ayayai Corp. had 61,000 shares of no-par common stock issued and outstanding. The stock has a stated value of $4 per share. During the year, the following transactions occurred.

Apr. 1 Issued 9,450 additional shares of common stock for $11 per share.

June 15 Declared a cash dividend of $1.50 per share to stockholders of record on June 30.

July 10 Paid the $1.50 cash dividend.

Dec. 1 Issued 4,200 additional shares of common stock for $11 per share.

Dec. 15 Declared a cash dividend on outstanding shares of $1.60 per share to stockholders of record on December 31.

Required:

Prepare the entries, if any, on each of the three dates that involved dividends.

Question

Business

King Nolan

26 August, 10:40

On January 1, Ayayai Corp. had 61,000 shares of no-par common stock issued and outstanding. The stock has a stated value of $4 per share. During the year, the following transactions occurred.

Apr. 1 Issued 9,450 additional shares of common stock for $11 per share.

June 15 Declared a cash dividend of $1.50 per share to stockholders of record on June 30.

July 10 Paid the $1.50 cash dividend.

Dec. 1 Issued 4,200 additional shares of common stock for $11 per share.

Dec. 15 Declared a cash dividend on outstanding shares of $1.60 per share to stockholders of record on December 31.

Required:

Prepare the entries, if any, on each of the three dates that involved dividends.

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Answers (1)

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Tristian · Answer 1

Answer and Explanation:

The Journal entry is shown below:-

1. Cash Dividend Dr, $105,675

(61,000 + 9,450) * $1.50

To Dividend payable $105,675

(Being dividend declared is recorded)

2. Cash dividend payable Dr, $105,675

To Cash $105,675

(Being dividend paid is recorded)

3. Cash dividend Dr, $119,440

(61,000 + 9,450 + 4,200) * $1.60

To Dividend payable $119,440

(Being dividend declared is recorded)