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West company declared a $0.50 per share cash dividend. the company has 190,000 shares issued, and 10,000 shares in treasury stock. the journal entry to record the dividend declaration is:

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to record the dividend declaration
   Ordinary Share Capital   $90000
          Dividend Payable         $90000
to record payment
     Dividend Payable         $90000
           Cash                            $90000

The amount is derived from the shares issued and outstanding so, the 190000 issued is deducted by 10000 treasury shares because treasury shares are reacquired by the company so it is not an outstanding share, then just multiply the answer with the dividend per share to arrive at $90000

190000-10000shares * $.50 =$90000

The journal entry to record the dividend declaration is:

Debit Retained Earnings $90,000 and Credit Common Dividends Payable $90,000

The steps below are correct in how to solve for the journal entry. A dividend declaration is that date where a company lets everyone know their next dividend payment. There is usually a press release prior to the dividend paying out. Retained earnings describes the money left over after a business pays out dividends to their shareholders. Dividends payable is the money that is paid to their shareholders.

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