Answer:
Date of Declaration
Dividend $400000 (debit)
Shareholders for Dividends $400000 (credit)
Date of Distribution
Shareholders for Dividend $400000(debit)
Bank$400000(credit)
Explanation:
Date of Declaration
On date of declaring a dividend, Green Day Corporation creates a present legal obligation to its Shareholders for the payment of dividends. Hence a Liability - Shareholders for Dividends mus be recognized.
Date of Distribution
On the day of distribution the Assets of Cash are declining to reflect outflow of economic benefit and the Shareholders for Dividends liability is decreasing to reflect the settlement of the liability.
