Hutter Corporation declared a $0.50 per share cash dividend on its common shares. The company has 35,000 shares authorized, 18,000 shares issued, and 14,000 shares of common stock outstanding. The journal entry to record the dividend declaration is:

Journal Entry

Dr. Dividend                $7,000

Cr. Dividend Payable $7,000

Explanation:

Dividend are only paid to the outstanding share. Outstanding shares re those share is in held by the stockholders of the company at a specific time period.

Authorised share are those shares which a company can issue in the market legally.

Issued shares are those share which have been issued by the company.

Dividend Declared = Outstanding shares x dividend per share.

Dividend Declared = 14,000 shares x $0.5 = $7,000

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