Question: This exercise continues our accounting for Sensations Salon, Inc., from Chapter 9. In this exercise, we will account for the declaration and issuance of a

This exercise continues our accounting for Sensations Salon, Inc., from Chapter 9. In this exercise, we will account for the declaration and issuance of a cash dividend by Sensations Salon, Inc. On November 5, 2016, Sensations Salon, Inc., declared a $5,000 cash dividend. The dividend was payable to all common shareholders of record on November 30 and was paid on December 10, 2016.

Requirements

1. Journalize the entries related to the dividends.

2. What was the effect of the dividend on the following?

• Cash

• Retained Earnings

• Total Stockholders' Equity

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