F1:M3|M4-Stockholders' Equity

Question 1

What is the Date of Declaration?

Answer 1

Date the board of directors formally declares/approves a dividend. On this date, a liability is created (dividends payable) and retained earnings is reduced (debited).

Question 2

What is the Date of Record?

Answer 2

The date the board of directors determine which shareholders are entitled to receive the dividend.

Question 3

What is the Date of Payment?

Answer 3

The date the dividend is actually disbursed/paid by the company or it’s paying agents.

Question 5

What is the journal entry on the date of declaration for a cash dividend?

Answer 5

Debit: Retained Earnings

Credit: Dividends Payable
🔑 Dividend becomes a liability on declaration.