Exercise 15-14 The stockholders’ equity accounts of G.K. Chesterton Company have

Question

Exercise 15-14 The stockholders’ equity accounts of G.K. Chesterton Company have the following balances on December 31, 2017. Common stock, $10 par, 300,000 shares issued and outstanding $3,000,000 Paid-in capital in excess of par—common stock 1,200,000 Retained earnings 5,600,000 Shares of G.K. Chesterton 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 5% 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) (a) (2) (b) (1) (b) (2) (c) (1) (c) (2)

Explanation / Answer

a Retained Earnings 555000 =300000*5%*37        Common Stock Dividend Distributable 150000 =300000*5%*10        Paid-in Capital in Excess of Par – Common Stock 405000 Common Stock Dividend Distributable 150000       Common Stock 150000 b Retained Earnings 3000000 =300000*10        Common Stock Dividend Distributable 3000000 Common Stock Dividend Distributable 3000000       Common Stock 3000000 c No entry 0 No entry 0 No entry 0 No entry 0

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