Question

Novak Corp. has 260,000 shares of $9 par value common stock outstanding. It declares a 11% stock dividend on December 1 when the market price per share is $17. The dividend shares are issued on December 31.

Prepare the entries for the declaration and distribution of the stock dividend. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
choose a transaction date in the order presented in the problem Dec. 1Dec. 31	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date in the order presented in the problem Dec. 1Dec. 31	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount

Answer 1

Solution

Date	Account Titles and Explanation	Debit	Credit
Dec 1	Stock Dividend	$ 486,200.00
	Paid in capital in excess of Par- Common stock		$     228,800.00
	Dividend distributable		$     257,400.00
	(To record declaration of dividend)
Dec 31	Dividend distributable	$ 257,400.00
	Common stock		$     257,400.00
	(To record distribution of dividend)

.

Shares outstanding before stock dividend	260000
Stock dividend rate	11%
New shares to be issued (260000 x 11%)	28600