Arco Corporation declared a cash dividend on June 2 of $6 per common share. The company has 2,000 shares of common stock authorized, 1,000 shares issued, and 200 in the treasury. This transaction to record the declaration of the cash dividend increases

Question

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The declaration of a cash dividend creates a liability for the company, as it now owes the declared amount to its shareholders.

Arco Corporation Declared a Cash Dividend on June 2 of $6