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3 December, 20:39

Hutter Corporation declared a $0.50 per share cash dividend on its common shares. The company has 22,000 shares authorized, 10,200 shares issued, and 8,800 shares of common stock outstanding. The journal entry to record the dividend declaration is:

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  1. 3 December, 22:59
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    Hutter Corporation Journal entry to record the dividend declaration is:

    Debit retained earnings 4,400

    Credit common dividend payable 4,400

    ($0.50*8,800)

    Explanation:

    Since we are to record dividend declaration that means we have to multiply $0.50 per share cash dividend by 8,800 shares of common stock outstanding which will give us 4,400.

    Last step is to Debit retained earnings with 4,400 and Credit common dividend payable with the same amount which is 4,400.
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