Answer: debit to Dividends Payable.
Explanation:
When the dividend was declared in July 15, the dividend amount was debited to the Retained earnings to show that it was being taken from Retained earnings. It was then credited to Dividends payable to show that the company owed dividends to its shareholders.
On August 15, this liability will be paid off when the dividends are paid and so the Dividends Payable account will be debited to reflect this.
