Healthy Life Co. is an HMO for businesses in the Fresno area. The following acco

Question

Healthy Life Co. is an HMO for businesses in the Fresno area. The following account balances appear on Healthy Life's balance sheet: Common stock (230,000 shares authorized 5,000 shares issued), $50 par, $250,000; Paid-In Capital in excess of par common stock, $25,000; and Retained earnings, $2,000,000 The board of directors declared a 2% stock dividend when the market price of the stock was$69 a share. Healthy Life reported no income or loss for the current year. If an amount box does not require an entry, leave it blank. If no entry is required, select "No entry required" from the dropdown. al. Journalize the entry to record the declaration of the dividend, capitalizing an amount equal to market value a2. Journalize the entry to record the issuance of the stock certificates.

Explanation / Answer

a1 Retained earnings 6900 =5000*2%*69         Stock dividend distributable 5000 =5000*2%*50         Paid in capital in excess of par-Common Stock 1900 a2 Stock dividend distributable 5000        Common Stock 5000 b Total paid in capital 275000 Total retained earnings 2000000 Total stockholders' equity 2275000 c Total paid in capital 281900 Total retained earnings 1993100 Total stockholders' equity 2275000

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