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.The entry to record the declaration of the cash dividend increases

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When a company declares a cash dividend, they create a legal obligation to pay their shareholders a certain amount of money by a specified date. This obligation is considered a liability, as it represents a debt that the company owes to its shareholders. Therefore, the entry to record the declaration of the cash dividend increases a liability account.

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