The journal entry to record the declaration of dividends on ordinary shares includes a debit to Retained Earnings and a credit to Ordinary Dividend Payable.

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When dividends are declared on ordinary shares, a debit is made to Retained Earnings (since this reduces the company's accumulated profits) and a credit is made to Ordinary Dividend Payable (since this represents a liability owed to shareholders).

The Journal Entry to Record the Declaration of Dividends on Ordinary