Question

Headland Corporation has 10.60 million shares of common stock issued and outstanding. On June 1, the board of directors voted an 73 cents per share cash dividend to stockholders of record as of June 14, payable June 30.

Prepare the journal entries for each of the dates above assuming the dividend represents a distribution of earnings. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit choose a transaction date 6/16/146/30 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount choose a transaction date 6/16/146/30 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount choose a transaction date 6/16/146/30 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount SHOW LIST OF ACCOUNTS LINK TO TEXT

How would the entries differ if the dividend were a liquidating dividend? (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit choose a transaction date 6/16/146/30 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount choose a transaction date 6/16/146/30 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount choose a transaction date 6/16/146/30 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount

Answer 1

	Assuming the dividend represents a distribution of earnings
Date	Account titles and explanation	Debit	Credit
Jun-01	Retained Earnings ( $ 10.60 million x 0.73 )	$ 7,738,000
	Dividends Payable		$ 7,738,000
	(To record the declaration of dividend)
Jun-14	No Entry	$ 0
	No Entry		$ 0
Jun-30	Dividends Payable	$ 7,738,000
	Cash		$ 7,738,000
	(To record the dividend payment)
	Assuming if the dividend is a liquidating dividend
Date	Account titles and explanation	Debit	Credit
Jun-01	Paid-in Capital in Excess of par value-Common Stock	$ 7,738,000
	Dividends Payable		$ 7,738,000
	(To record the declaration of dividend)
Jun-14	No Entry	0
	No Entry		0
Jun-30	Dividends Payable	$ 7,738,000
	Cash		$ 7,738,000
	(To record the dividend payment)