Dividend Income
Definition: Income from equity investments
Scope:ModerateDifficulty:Easy
Income from equity investments
Common Journal Entries
| Account | Debit | Credit |
|---|---|---|
| 1. Record dividend declared | ||
| Investee declares $1,200 dividend. | ||
| Dividend ReceivableAsset+ | $1,200 | |
| Dividend Income | $1,200 | |
| Income from equity investment (cost method). | ||
| 2. Receive dividend | ||
| Cash received on payment date. | ||
| CashAsset+ | $1,200 | |
| Dividend ReceivableAsset− | $1,200 | |
| Receivable cleared. | ||
T-AccountsA visual representation of a ledger account shaped like the letter T. Left side shows debits, right side shows credits.
Dividend ReceivableDividend ReceivableAssetA resource owned by the business. Normal balance: debit. Debits increase, credits decrease.
DebitLeft side of a journal entry. Increases assets and expenses. Decreases liabilities, equity, and revenue.
$1,200.00
◀ Normal bal.
CreditRight side of a journal entry. Increases liabilities, equity, and revenue. Decreases assets and expenses.
$1,200.00
$0.00
Dividend IncomeDividend IncomeAssetA resource owned by the business. Normal balance: debit. Debits increase, credits decrease.
DebitLeft side of a journal entry. Increases assets and expenses. Decreases liabilities, equity, and revenue.
◀ Normal bal.
CreditRight side of a journal entry. Increases liabilities, equity, and revenue. Decreases assets and expenses.
$1,200.00
$1,200.00
CashAsset account. Debits increase the balance. Credits decrease the balance.AssetA resource owned by the business. Normal balance: debit. Debits increase, credits decrease.
DebitLeft side of a journal entry. Increases assets and expenses. Decreases liabilities, equity, and revenue.
$1,200.00
◀ Normal bal.
CreditRight side of a journal entry. Increases liabilities, equity, and revenue. Decreases assets and expenses.
$1,200.00
DurationN/A
External Links
- Dividend#Accounting — Wikipedia