Question

tb mc qu. 11-112 (static) on february 16, hawthorne company declares...

on february 16, hawthorne company declares a \\$0.68 dividend to be paid on april 5. hawthorne has 1,900,000 shares of common stock issued and outstanding. the entry recorded by the company on february 16 includes a debit to:

Explanation:

Calculate total dividend declared

$$ \text{Total Dividend} = 1,900,000 \text{ shares} \times \$0.68 \text{ per share} = \$1,292,000 $$

Determine the declaration date journal entry

On the declaration date (February 16), the company records the liability to pay the dividend:

• Debit: Cash Dividends (or Retained Earnings) for \$1,292,000
• Credit: Dividends Payable for \$1,292,000

Identify the debit account and amount

The entry on February 16 includes a debit to Cash Dividends (or Retained Earnings) for \$1,292,000.

Answer:

A debit to Cash Dividends (or Retained Earnings) for \$1,292,000.