Answer:
Common dividend payable A/c Dr $12,000
To Cash A/c $12,000
(Being the dividend is paid)
Explanation:
The journal entry is shown below:
Common dividend payable A/c Dr $12,000
To Cash A/c $12,000
(Being the dividend is paid)
The computation is shown below:
= Number of common shares × cash dividend per share
= 12,000 common shares × $1 per share
= $12,000
Since the common dividend payable is a liability account so we debited it and since the payment is made which reduces the cash balance so we credited it
