ID: A 4. Mertz Motors Corporation has 2,000,000 authorized shares of $10 par val

Question

ID: A 4. Mertz Motors Corporation has 2,000,000 authorized shares of $10 par value common stock. As of June 30, 2010, there were 1,000,000 shares issucd and outstanding. On Junc 30, 2010, the board of directors declareda $0.20 per share cash dividend to be paid on August 1, 2010, to shareholders of record on July 15, 2010, Prepare the necessary entries in journal form to be recorded on (a) the date of declaration, (b) the date of record, and (c) the date of payment. (Omit explanations.) General JournalRost Debit Credit Description Date Ref

Explanation / Answer

Date Description Debit ($) Credit ($) (a) the date of declaration June 30 , 2010 Cash Dividends 200,000 Dividends Payable 200,000 [1,000,000 shares * $0.20] July 15 , 2010 (b) on date of record No Entry required (c) on date of payment August 1 , 2010 Dividends Payable 200,000 Cash 200,000

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