Hi
I have just paid my first dividend but I cannot get the entries to work. Can anybody help?
My understanding on dividends is:
For a cash dividend in a company, the usual entries are:
On declaration:
- Debit Retained earnings.
- Credit Dividends payable. - Liability account
On payment:
- Debit Dividends payable.
- Credit Cash.
I created the journal when the dividend was declared on 28th February 2026.
Then I have paid it from the bank account and on tagging it as a dividend payment it creates the dividend voucher (which is brilliant BTW) and then debits 3102 Dividends Paid. So I now have the liability sitting on the BS and a double deduction sitting in Retained Profits.
Should I forget the first step and just do the payment part through QF? Or is there another journal I should do?
Thx.
Regards
Michael