A company's board of directors votes to declare a cash dividend of $1.00 per share on its 12,000 common shares outstanding. The journal entry to record the payment of the cash dividend is:

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The payment of a cash dividend results in a decrease in cash and an increase in the liability Common Dividend Payable. Therefore, the journal entry to record the payment of the cash dividend is to debit Common Dividend Payable for $12,000 and credit Cash for $12,000. Option A is incorrect as it involves debiting Common Dividend Payable and also crediting Retained Earnings, which is not appropriate. Option B is incorrect as dividend expense is recorded at the time of the declaration and not at the time of payment. Option C is incorrect as it involves debiting Retained Earnings, which is not appropriate. Option E is incorrect as it involves crediting Common Dividend Payable, which is not appropriate.

A Company's Board of Directors Votes to Declare a Cash