Question

The stockholders’ equity accounts of Skysong Company have the following balances on December 31, 2020. Common...

The stockholders’ equity accounts of Skysong Company have the following balances on December 31, 2020.

Common stock, $10 par, 272,000 shares issued and outstanding $2,720,000
Paid-in capital in excess of par—common stock 1,190,000
Retained earnings 5,380,000


Shares of Skysong Company stock are currently selling on the Midwest Stock Exchange at $37.

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 6% 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.

No.

Account Titles and Explanation

Debit

Credit

(a) (1)

enter an account title for case A to record the declaration of stock dividends

enter a debit amount

enter a credit amount

enter an account title for case A to record the declaration of stock dividends

enter a debit amount

enter a credit amount

enter an account title for case A to record the declaration of stock dividends

enter a debit amount

enter a credit amount

(a) (2)

enter an account title for case A to record the issuance of stock dividends

enter a debit amount

enter a credit amount

enter an account title for case A to record the issuance of stock dividends

enter a debit amount

enter a credit amount

(b) (1)

enter an account title for case B to record the declaration of stock dividends

enter a debit amount

enter a credit amount

enter an account title for case B to record the declaration of stock dividends

enter a debit amount

enter a credit amount

(b) (2)

enter an account title for case B to record the issuance of stock dividends

enter a debit amount

enter a credit amount

enter an account title for case B to record the issuance of stock dividends

enter a debit amount

enter a credit amount

(c) (1)

enter an account title for case C to record the declaration of the stock split

enter a debit amount

enter a credit amount

enter an account title for case C to record the declaration of the stock split

enter a debit amount

enter a credit amount

(c) (2)

enter an account title for case C to record the issuance of the stock split

enter a debit amount

enter a credit amount

enter an account title for case C to record the issuance of the stock split

enter a debit amount

enter a credit amount

Homework Answers

Answer #1
No. Account Titles and Explanation Debit Credit
(a) (1) Retained earnings (272,000 shares * 6 % * $37) 603,840
Common stock dividend distributable (272,000 shares * 6 % * $10) 163,200
Paid-in capital in excess of par- Common Stock 440,640
(To record declaration of stock dividends)
(a) (2) Common stock dividend distributable 163,200
Common stock 163,200
(To record issuance of stock dividends)
(b) (1) Retained earnings (272,000 shares * 100 % * $10) 2,720,000
Common stock dividend distributable 2,720,000
(To record declaration of stock dividends)
(b) (2) Common stock dividend distributable 2,720,000
Common stock 2,720,000
(To record issuance of stock dividends)
(c) (1) No Entry
No Entry
(c) (2) No Entry
No Entry
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