If a company issues a 2:1 common stock split, how will the company record the sp

Question

If a company issues a 2:1 common stock split, how will the company record the split?

A) The company will use a journal entry to double the number of shares issued.
B) The company will debit stock dividends and credit dividends payable.
C) The company will make changes to the statement of stockholder's equity to show a doubling of shares issued and halving of par-value.
D) The company will adjust the dollar balances in common stock, treasury stock and additional paid-in capital to reflect the change in value per common share.

Explanation / Answer

C) The company will make changes to the statement of stockholder's equity to show a doubling of shares issued and halving of par-value.

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