Question

Prepare entries to record the following selected transactions completed during the current fiscal year:

Feb.	1		The board of directors declared a stock split which reduced the par of common shares from $100 to $20. This action increased the number of outstanding shares to 500,000.
	11		Purchased 25,000 shares of the company's own stock at $44, recording the treasury stock at cost.
May	1		Declared a dividend of $2.50 per share on the outstanding shares of common stock.
	15		Paid the dividend declared on May 1.
Oct.	19		Declared a 2% stock dividend on the common stock outstanding (the fair market value of the stock to be issued is $55).
Nov.	12		Issued the certificates for the common stock dividend declared on October 19.

If no entry is required, select "No Entry" and leave the amount boxes blank. If an amount box does not require an entry, leave it blank.

Feb. 1
Feb. 11
May 1
May 15
Oct. 19
Nov. 12

Answer 1

Journal Entries

Date	General Journal	Debit	Credit
Feb-01	No Entry Required
Feb-11	Treasury Stock	$1100000
	Cash		$1100000
May-01	Cash Dividends	$1187500
	CAsh Dividends Payable		$1187500
May-15	Cash Dividends payable	$1187500
	Cash		$1187500
Oct-19	Stock Dividends	$522500
	Stock Dividends Distributable		$190000
	Paid in capital - Excess of par		$332500
Nov-12	Stock Dividends Distributable	$190000
	Common Stock		$190000