Cash Dividends Journal Entry

Cash dividend journal entry in the general journal. We will post the journal entries to a worksheet to see the effect on the accounts and accounting equation. There are two journal entry time frames related to cash dividends. The first is the date of declaration. This is when the board of directors decides on a cash dividend. At the date of declarations we record a debit to dividends or retained earnings and a credit to the liability account of dividends payable. At some point in the future we pay the dividend and record the dividend journal entry of credit to cash and debit to dividend payable, reducing cash and reducing the liability. For more accounting information see website.…


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