On February 16,a company declares a 68¢ dividend to be paid on April 5.There are 950,000 shares of common stock issued and outstanding.The entry recorded by the company on April 5 includes a debit to:
A) A debit to Dividends Payable and a credit to Cash for $680,000.
B) A debit to Dividends and a credit to Dividends Payable for $646,000.
C) A debit to Dividends Payable and a credit to Cash for $646,000.
D) A debit to Dividends and a credit to Dividends Payable for $680,000.

Question

Quizplus · Accepted Answer

The entry recorded by the company on April 5 includes a debit to Dividends Payable and a credit to Cash for the total amount of the dividend to be paid, which is 68¢ x 950,000 shares = $646,000. Therefore, choice C is the correct option. The other options either have debit and credit accounts reversed or include an incorrect amount.

On February 16,a Company Declares a 68¢ Dividend to Be