2. Cash and Stock Dividends Debits and Credits

Entry for date of declaration for a cash dividend

Debit Retained Earnings, Credit Common Dividend Payable

Is there an entry for the date of record for a cash dividend?

No

Entry for date of payment for a cash dividend

Debit Common Dividend Payable (This was recorded on the date of declaration), Credit Cash since we are paying out the dividends.

When is a stock dividend small vs large?

Small if it is 25% or less and large if it is more than 25%

What is the entry for the date of declaration for a small stock dividend?

Debit Retained earnings for amount calculated, Credit Common Stock Dividend Distributable for shares in the stock dividend x par value $ amount, Credit Paid-In Capital in Excess of Par Value, Common Stock for total amount above Par Value.

Is any entry made on the date of record for a stock dividend?

No.

What is the entry for date of payment of a small stock dividend?

Debit Common Stock Dividend Distributable for amount credited to the same account on date of declaration, Credit Common Stock, $ Par Value for same amount

What is the entry to record a large stock dividend on the date of declaration?

Debit Retained Earnings for amount calculated, Credit Common Stock Dividend Distributable for the same amount.

What is the entry to record date of payment for a large stock dividend?

Debit Common Stock Dividend Distributable for amount it was credited on date of declaration, Credit Common Stock, $ Par value for same amount

Entry to record payment of a cash dividend (textbook's way)

Debit Dividends account for amount of cash dividend paid to shareholders, Credit Cash for same amount.

Entry to record declaration of cash dividend (textbook's way)

Debit Retained earnings, Credit Cash

• This is an alternative way to the other textbook way.