Accounting for cash dividends (Learning Objective 4) 10–15 min.

Baassir Corporation earned net income of $750,000 during the year ended December 31, 2013. It had 2,000,000 authorized shares of $20 par value common stock. As of June 30, 2014, there were 500,000 shares issued and outstanding. On June 30, 2014, the board of directors declared a $0.50 per share cash dividend to be paid on August 1, 2014.

Prepare the necessary journal entries to be recorded on:

a. the date of declaration.

b. the date of payment.

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