Cash and Stock Dividends
Essay Preview: Cash and Stock Dividends
Report this essay
Dividends are paid to shareholders who own stock within a company. Stock splits occur when a company issues more stock to its shareholders, while reducing the stated value of the individual shares. This makes the shareholder whole. There is not a journal entry for a stock split because it has no effect on the retained earnings, paid in capital, or stockholders equity.

Cash dividends are recorded on the declaration date as well as the payment date. Cash dividends are recorded on the declaration date as a debit to the Cash Dividends account, and as a credit to the Dividends Payable account. On the date of payment, the cash dividends are recorded as a debit to the Dividends Payable account, and a credit to the Cash account.

Stock dividends are also recorded on the declaration date as well as the date of payment. The stock dividends declaration date amount is recorded as a debit to the Stock Dividends account and a credit to the Paid- In Capital in Excess of (Par or Stated) Value account. There would also be a credit in the Common Stock Dividends Distributable account. The payment date record would be a debit to the Common Stock Dividends Distributable account, and a credit to the Common Stock account.

Get Your Essay

Cite this page

Cash Dividends And Declaration Date. (May 31, 2021). Retrieved from https://www.freeessays.education/cash-dividends-and-declaration-date-essay/