Belmonte Mezzagno, an Italian Entity That Manufactures Wine, Aranciata, and Other

Belmonte Mezzagno, an Italian entity that manufactures wine, aranciata, and other Italian beverages has 2.5 million common equity shares issued and outstanding. On December 20, the board determined that dividends ought to be paid to the shareholders on this year's record profits. On January 3, 20X2, Belmonte Mezzagno formally declared dividends of €0.35 per share. The reporting period ended December 31, 20X1. The financial statements were authorized for issuance by the board on March 15, 20X2. What should the dividend liability be recorded as for Belmonte Mezzagno as of December 31, 20X1?

A) €875,000
B) €2,500,000
C) €0
D) None of the above