On June 30, a Company Declared a Cash Dividend of $0.35

question 215

Essay

On June 30, a company declared a cash dividend of $0.35 per common share to the shareholders of record on July 15. The cash dividend will be paid on July 31. This company has 500,000 shares authorized and 100,000 shares outstanding. Prepare the journal entries required on June 30, July 15 and July 31.

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Definitions:

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the business's operating cycle, whichever is longer.

Held-To-Maturity

A classification for investments in fixed-income securities that an investor intends and is able to hold until maturity, recognizing unrealized gains or losses in the financial statements.

Bonds

Debt securities issued by entities such as corporations or governments to raise funds, promising to repay the principal along with interest at a specific date.

Interest Revenue

Interest Revenue is income earned from investments in various debt instruments, including savings accounts, bonds, and loans, where others pay interest to the entity holding those assets.