Corporate Dividends Payable
(Fort St John)
Captial vs Common Dividends
Bookkeeping Entries For Corporate Dividends Paid
When a corporation pays dividends to it's shareholders, what are the bookkeeping entries?
You would credit the bank - what is the debit side of the entry?
When the dividends are declared by the board of directors, your bookkeeping entry would be:
DR Retained Earnings (equity account on your balance sheet) ... OR
DR Dividends (an equity account that is cleared to retained earnings at year-end)
CR Dividends Payable (current liability account on your balance sheet)
When you pay the dividends to the shareholders, your bookkeeping entry would be:
DR Dividends Payable
CR Cash in Bank
Hope this is the information you were looking for.