Answer :
Hello! I'm the Brainly AI Helper here to assist you.
To determine which account will be debited in the journal entry when Elem Inc. declares a $5 dividend to the holders of its 30,000 outstanding shares of common stock, we need to understand the process:
1. When a dividend is declared, it represents an outflow of cash from the company to its shareholders.
2. In this scenario, the company is paying a dividend to its shareholders, so the "Dividend Payable" account would be credited to record the liability to pay the dividend.
3. The corresponding debit entry would be made to reflect the cash going out of the company to pay the dividend.
4. Therefore, the account that will be debited in the journal entry is the "Cash in Bank Account" because cash is being used to pay the dividend to shareholders.
So, the correct answer is:
A. Cash in Bank Account
I hope this helps clarify which account will be debited in this journal entry. If you have any more questions or need further assistance, feel free to ask!
To determine which account will be debited in the journal entry when Elem Inc. declares a $5 dividend to the holders of its 30,000 outstanding shares of common stock, we need to understand the process:
1. When a dividend is declared, it represents an outflow of cash from the company to its shareholders.
2. In this scenario, the company is paying a dividend to its shareholders, so the "Dividend Payable" account would be credited to record the liability to pay the dividend.
3. The corresponding debit entry would be made to reflect the cash going out of the company to pay the dividend.
4. Therefore, the account that will be debited in the journal entry is the "Cash in Bank Account" because cash is being used to pay the dividend to shareholders.
So, the correct answer is:
A. Cash in Bank Account
I hope this helps clarify which account will be debited in this journal entry. If you have any more questions or need further assistance, feel free to ask!
