Answered: Cash Dividends Bernard Corporation has…

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter21: Corporations: Taxes, Earnings, Distributions, And The Statement Of Retained Earnings

Section: Chapter Questions

Problem 3SEA

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Question

Cash Dividends

Bernard Corporation has the following shares outstanding: 8,000 shares of $50 par value, six percent preferred stock and 50,000 shares of $1 par value common stock. The company has $328,000 of retained earnings. At year‑end, the company declares its regular $3 per share cash dividend on the preferred stock and a $2.20 per share cash dividend on the common stock. Three weeks later, the company pays the dividends.

a. Prepare the journal entry for the declaration of the cash dividends.
b. Prepare the journal entry for the payment of the cash dividends.

General Journal
Ref.	Description	Debit	Credit
a.	Answer	Answer	Answer
	Answer	Answer	Answer
	Dividends Payable - Common Stock	Answer	Answer
	To record declaration of dividend on preferred stock andcommon stock.
b.	Answer	Answer	Answer
	Dividends Payable - Common Stock	Answer	Answer
	Answer	Answer	Answer
	To record payment of dividends on preferred and common stocks.