Bogscraft Company has outstanding 61, 000 shares of $10 par value common stock a

Question

Bogscraft Company has outstanding 61, 000 shares of $10 par value common stock and 25, 200 shares of $20 par value preferred stock (8 percent). On February 1, the board of directors voted in favor of an 8 percent cash dividend on the preferred stock. The cash dividends were paid on March 15. The company closed its books at its fiscal year-end, June 30. Required: Prepare journal entries to record the events on (a) February 1, (b) March 15, and (c) June 30. 1. Record the declaration of a cash dividend of 8 percent to the 25, 200 shares of $20 par value preferred stock outstanding. 2. Record the payment of the cash dividend to the preferred shareholders. 3. Company closed its books at its fiscal year-end, June 30.

Explanation / Answer

Jornal entries

1. For declaration of cash dividend

No journal entry is required to be passed for declaration of dividend

2. For payment of dividend on March 15

3. closing entry on june 30th

Debit Credit Dividend 40320 cash 40320

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