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A company declared a $0.50 per share cash dividend. The company has 20,000 shares authorized, 15,000 shares issued, and 12,000 shares of common stock outstanding. The journal entry to record the dividend declaration is_________.

Respuesta :

Explanation:

The journal entry to record the declaration of the dividend is shown below:

Retained earnings A/c Dr $6,000

              To Common Dividend payable A/c $6,000

(Being the dividend is declared)

The computation of the dividend amount is shown below:

= Number of outstanding common stock shares × dividend declared per share

= 12,000 shares × $0.50

= $6,000

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