Question

Exercise 15-14

The stockholders’ equity accounts of Sunland Company have the following balances on December 31, 2017.

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 Sunland 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

		Debit	Credit
a	Retained Earnings	809200		=289000*8%*35
	Common Stock Dividend Distributable		231200	=289000*8%*10
	Paid-in Capital in Excess of Par-common		578000
	Common Stock Dividend Distributable	231200
	Common Stock		231200
b	Retained Earnings	2890000
	Common Stock Dividend Distributable		2890000
	Common Stock Dividend Distributable	2890000
	Common Stock		2890000
c	No entry	0
	No entry		0
	No entry	0
	No entry		0