Question

Identify and explain the importance of the three dates relevant to corporate dividend

Short answer

Following are the three dates relevant to the corporate dividend:

1. Date of declaration
2. Date of record
3. Date of Payment

Step-by-step solution

Meaning of Dividend

A dividend refers to a part of a company's earnings that it pays its shareholders

Importance of the three dates

1. Date of declaration:It is the date the board of directors will vote and declare for dividend payment. It is also known as the announcement date.

When the company declares divided, it creates a liability for the company.

2. Date of Record:It is the date to identify the eligible stockholder to receive the dividend. No journal entry is required.

3. Date of Payment:It is the date when the corporation makes the actual payment of the dividend.