The board of directors of Benson Company declared a cash dividend of $1.50 per share on 42,000 shares of common stock on July 15, 2020.The dividend is to be paid on August 15, 2020, to stockholders of record on July 31, 2020.The correct entry to be recorded on August 15, 2020, will include a
A)debit to Cash Dividends.
B)credit to Cash Dividends.
C)credit to Dividends Payable.
D)debit to Dividends Payable.

Question

Quizplus · Accepted Answer

On the payment date, the company debits Dividends Payable to decrease the liability and credits Cash to reflect the payment of the dividend.

The Board of Directors of Benson Company Declared a Cash