If your business is a corporation, and your corporation has declared a dividend payable to shareholders, the declared dividend needs to be recorded on the books. Assuming the dividend will not be paid until after year end, an adjusting entry needs to be made in the general journal.
|
Debit | Credit | |
Retained earnings | 10,000 | |
Dividends payable | 10,000 | |
To record dividends payable as of 12/31/2001 |