Question

ournalize the following selected transactions completed during the current fiscal year.

Jan.   3		The board of directors declared a stock split that reduced the par of common shares from $100 to $20. This action increased the number of outstanding shares to 400,000.
22		Declared a dividend of $1.75 per share on the outstanding shares of common stock.
Feb.   8		Paid the dividend declared on January 22.
Sept. 1		Declared a 5% stock dividend on the common stock outstanding (the fair market value of the stock to be issued is $30.)
Oct.   1		Issued the certificates for the common stock dividend declared on September 1.

Answer 1

Date	Title	Debit	Credit
Jan-03	No entry
	No entry
Jan-22	Cash dividend ($1.75*400,000)	$ 700,000
	Dividend payable		$ 700,000
	(To record dividend declared)
Feb-08	Dividend payable	$ 700,000
	Cash		$ 700,000
	(To record payment of dividend)
Sep-01	Stock dividend (400,000*5%*$30)	$ 600,000
	Dividend distributable (400,000*5%*$20)		$ 400,000
	Paid in capital in excess of par		$ 200,000
	(To record declaration of stock dividend)
Oct-01	Dividend distributable	$ 400,000
	Common stock		$ 400,000
	(To record distribution of stock dividend)

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