Question

The stockholders’ equity accounts of Sandhill Company have the following balances on December 31, 2020. Common stock, $10 par, 289,000 shares issued and outstanding $2,890,000 Paid-in capital in excess of par—common stock 1,300,000 Retained earnings 5,860,000 Shares of Sandhill Company stock are currently selling on the Midwest Stock Exchange at $35. Prepare the appropriate journal entries for each of the following cases. (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.) (a) A stock dividend of 8% is (1) declared and (2) issued. (b) A stock dividend of 100% is (1) declared and (2) issued. (c) A 2-for-1 stock split is (1) declared and (2) issued.

Answer 1

a) Journal entries

No	General Journal	Debit	Credit
1	Stock dividend (289000*8%*35)	809200
	Common Stock dividend distributable		231200
	paid in capital in excess of par-Common Stock		578000
2	Common Stock dividend distributable	231200
	Common Stock		231200

b) Journal entries

No	General Journal	Debit	Credit
1	Stock dividend (289000*100%*10)	2890000
	Common Stock dividend distributable		2890000
2	Common Stock dividend distributable	2890000
	Common Stock		2890000

c) Journal entry

No	General Journal	Debit	Credit
1)	No Journal entry
2)	No Journal entry