National Chocolate Corp. produces chocolate bars and snacks under the brand names Blast and Soothe. A press release contained the following information:
March 5 National Chocolate Corp. today announced that its Board of Directors has declared a special one-time cash dividend of $ 1 per share on its 100,000 outstanding common shares. The dividend will be paid on April 29 to shareholders of record at the close of business on March 26. The Company’s fiscal year will end April 30.
Required:
1. Prepare any journal entries that National Chocolate Corp. should make on the four dates mentioned in the press release.
2. What two requirements would the board of directors have considered before making the dividend decisions?