Bonbon Confections produces chocolate bars and snacks under the brand names Blast and Soothe. A press release contained the following information:

March 5Bonbon Confections today announced that its Board of Directors has declared a special one-time cash dividend of $1.10 per share on its 91,000 outstanding common shares. The dividend will be paid on April 29 to shareholders of record at the close of business on March 26. The Companys fiscal year will end April 30.

Required:

1. Prepare any journal entries that Bonbon Confections should make on the four dates mentioned in the press release.

a. Record the declaration of a cash dividend of $1.10 per share payable on the 91,000 shares of common stock outstanding.

b. Record the entry on the date of record. (march 26)

c. Record the payment of the cash dividend. (April 29)

d. Record the entry to close dividends account. (April 30)

2. What would the board of directors have considered before making the dividend decisions?