Journal Entries

Question 1

What is the entry for cash dividend?

Answer 1

One the date of Declaration:
Retained Earning DR
Dividend Payable CR

Payment Date:
Dividend Payable DR
Cash CR

Question 2

What is the entry for issuance of stock?

Answer 2

Cash DR
Common Stock @ Par Value CR
Additional Paid Capital CR

Question 3

What is the entry for Property Dividend?

Answer 3

On the Declaration Date: Property need to remeasure to the FMV
Land (Property) DR (record the diff betw the FMV and cost)
Gain/Loss CR

Retained Earning (FMV)          DR
     Property Dividend Payable            CR

One Payment Date:
Property Dividend Payable DR
Land (Property) CR

Question 4

What is the entry for stock dividend?

Answer 4

Retained Earning @ Par DR
Common Stock CR
Addition Paid In Capital CR

Question 5

What is the entry to recognized Bad Debt expense?

Answer 5

Bad Debt Expense DR

Allowance for Un-collectible Account CR

Question 6

What is the entry to recognized sales return?

Answer 6

Sales Return (Contra Revenue)             DR
      Allowance for Sales Return                         CR

Question 7

What is the entry to write off A/R?

Answer 7

Allowance for Un-collectible Account DR
Account Receivable CR

A write off has:

• No affect on expenses
• No Affect on the carry amount of NRV on A/R thus no effect on the working capital.

Question 8

What is the entry to record Factoring?

Answer 8

Cash DR
Due from Factoring (Reserve) DR
Loss of Sales of Receivable DR
Prepaid Interest DR
Account Receivable A/R