Mocha Company earned net income of $ 105,000 during the year ended December 31, 2018. On December 15, Mocha declared the annual cash dividend on its 2 % preferred stock (par value, $ 125,000 ) and a $0.25 per share cash dividend on its common stock (62,000 shares). Mocha then paid the dividends on January 4, 2019.

Journalize for Mocha the entry declaring the cash dividends on December 15, 2018.

Question

Business

Guadalupe

30 June, 08:43

Mocha Company earned net income of $ 105,000 during the year ended December 31, 2018. On December 15, Mocha declared the annual cash dividend on its 2 % preferred stock (par value, $ 125,000 ) and a $0.25 per share cash dividend on its common stock (62,000 shares). Mocha then paid the dividends on January 4, 2019.

Journalize for Mocha the entry declaring the cash dividends on December 15, 2018.

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Answers (1)

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Gregory Hess · Answer 1

The answer is given below;

Explanation:

Retained Earnings (125,000*2%) Dr.$2,500

Dividend payable Cr.$2,500

Retained Earnings (62,000*.25) Dr.$15,500

Dividend Payable Cr.$15,500