Question

Selected transactions completed by Canyon Ferry Boating Corporation during the current fiscal year are as follows: Jan. 8 Split the common stock 2 for 1 and reduced the par from $80 to $40 per share. After the split, there were 123,000 common shares outstanding. Apr. 30 Declared semiannual dividends of $0.80 on 16,500 shares of preferred stock and $0.27 on the common stock payable on July 1. Jul. 1 Paid the cash dividends. Oct. 31 Declared semiannual dividends of $0.80 on the preferred stock and $0.15 on the common stock (before the stock dividend). In addition, a 3% common stock dividend was declared on the common stock outstanding. The fair market value of the common stock is estimated at $51. Dec. 31 Paid the cash dividends and issued the certificates for the common stock dividend.

Answer 1

Journal Entries :-

Date	Particulars	Debit($)	Credit($)
Jan 8	No Entry
April 30	Dividend A/c Dr. ((16500*$0.80)+(123000*$0.27))	46410
	To Dividend Payable A/c		46410
July 1	Dividend Payable A/c Dr.	46410
	To Cash A/c		46410
Oct 31	Dividends A/c Dr. ((16500*$0.80)+(123000*$0.15))	31650
	To Dividend Payable A/c		31650
	Retained Earnings A/c Dr. (123000 * 3% * $51)	188190
	To Common Stock Dividend Distributable A/c (123000*3%*$40)		147600
	To Paid in Capital in excess of par ($188190-$147600)		40590
Dec31	Dividend Payable A/c Dr.	31650
	To Cash A/c		31650
	Common Stock Dividend Distributable A/c Dr.	147600
	To Common Stock A/c (123000 * 3% * $40)		147600