1. XYZ Company consists of 100,000 shares of stock outstanding. On January 1, 200X XYZ Company declared a cash dividend of .50 per share to be paid on January 31. On January 1 XYZ Company will make the given journal entry:
a) Debit cash $50,000 and credit dividends payable $50,000.
b) Debit dividends declared $50,000 and credit dividends payable $50,000.
c) Credit cash $50,000and debit dividends declared $50,000.
d) No entry is made till January 31.
2. Which of the given will result when a dividend is paid?
a) A credit to dividends payable.
b) A debit to dividends payable.
c) A debit to capital.
d) A credit to capital.