E15-12b (cash dividend and liquidating dividend) alpha corporation

E15-12B (Cash Dividend and Liquidating Dividend) Alpha Corporation has 25 million shares of common stock issued and outstanding. On August 31 the board of directors voted a $1.20 per share cash dividend to stockholders of record as of September 5, payable September 30.


(a) Prepare the journal entry for each of the dates above assuming the dividend represents a distribution of earnings.

(b) How would the entry differ if the dividend were a liquidating dividend?