On 1 November 2014, Oster Company Declared a Dividend of $3.00

Multiple Choice

On 1 November 2014, Oster Company declared a dividend of $3.00 per share. Oster Company has 20 000 ordinary shares outstanding and no preference shares. Which of the following is the journal entry needed to record the declaration of dividends?

A) Debit Retained earnings $60 000 and credit Dividends payable $60 000.
B) Debit Cash $60 000 and credit Dividends payable $60 000.
C) Debit Retained earnings $60 000 and credit Cash $60 000.
D) Debit Dividends payable $60 000 and credit Retained earnings $60 000.