Weaver Corporation had the following stock issued and outstanding at January 1, Year 1:

150,000 shares of $1 par common stock.
15,000 shares of $100 par, 6 percent, noncumulative preferred stock.

On June 10, Weaver Corporation declared the annual cash dividend on its 15,000 shares of preferred stock and a $0.50 per share dividend for the common shareholders. The dividends will be paid on July 1 to the shareholders of record on June 20.

Prepare general journal entries to record the declaration and payment of the cash dividends. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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1.On June 10, Weaver Corporation declared the annual cash dividend on its 15,000 shares of preferred stock and a $0.50 per share dividend for the common shareholders.
2.The shareholders on record on June 20 will receive a dividend payment to be paid July 1.
3.On July 1, the dividends are paid to the shareholders of record on June 20.
4.On December 31, the closing entry for dividends is recorded.

Check the explanation

Explanation:

A)

Preferred shareholder (15000×$100)×6%                     $90000

Common shareholder (150000×$0.5)                           $75000

Total dividend                                                                  $165000

B)

Date                  journal                                  debit                     credit

10 june                dividend                            $165000  

               To dividend payable                                              $165000

           (To record dividends payable)  

20 june             no entry required                                                

01 july           dividend payable                  $165000  

                         To cash                                                         $165000

           (To record dividend payment)  

31 dec.              Retained earning                $165000  

                      To dividends                                                       $165000

            (To close dividend account)  

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