A company's board of directors votes to declare a cash dividend of $1.00 per share on its 12,000 common shares outstanding. The journal entry to record the declaration of the cash dividend is:
A. Debit Common Dividend Payable $12,000; credit Retained Earnings $12,000.
B. Debit Retained Earnings $12,000; credit Common Dividend Payable $12,000.
C. Debit Dividend Expense $12,000; credit Common Dividend Payable $12,000.
D. Debit Common Dividend Payable $12,000; credit Cash $12,000.
E. Debit Dividend Expense $12,000; credit Cash $12,000.
Answer: B
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