Dividend entries, from declaration to distribution
When the board declares a dividend, accounting has to turn a per-share amount into payables by share class, then book the declaration and the payment on different dates. The Accounting Agent calculates the declared amount from your share records and drafts both entries for review.
What the Accounting Agent prepares
- A dividend calculation by share class, using shares outstanding at the record date and the declared rate
- A drafted declaration entry for the dividend payable, dated to the declaration
- A drafted distribution entry for the payment, matched to the cash that left the bank
- Dividends payable tracked until paid, with the balance tied to the GL
- The declared amount carried into the retained earnings reconciliation and equity roll-forward
How it works
- Pull the data. Declaration terms, shares outstanding by class, and GL balances come from your equity records and ERP.
- Prepare the work in your logic and format. The Accounting Agent calculates the dividend and builds both entries in your format, with the board terms attached as support.
- Review and approve. You check the calculation and approve. The payable and distribution entries post to your ERP once approved.
What stays in your control
- The declared rate and record date come from your board resolution, not from Ledge
- Each entry posts only after approval
- The calculation, support, and sign-offs stay with the close task
Standard note
FAQ
What is the journal entry for a declared dividend?
For a cash dividend, retained earnings is debited and dividends payable is credited on declaration. On payment, dividends payable is debited and cash is credited. The Accounting Agent drafts both for your review.
Can it handle multiple share classes?
Yes. The Accounting Agent applies the declared rate for each class to the shares outstanding at the record date, following the terms in your records. Preferred and common classes can carry different rates, so each class gets its own line in the calculation.
Does Ledge pay the dividend?
No. Payment runs through your bank and treasury process. Ledge matches the payment to the distribution entry and keeps the payable reconciled.
