Januar 1 2017 Hluc Spruce Corp. had $1,100 00d of common stock outstanding that

Question

Januar 1 2017 Hluc Spruce Corp. had $1,100 00d of common stock outstanding that w s issued at par and retained earnings of S 19.000. The campany issued 30 D00 shares of common stock at par on July 1 and earned net incomc of S 54,000 for thc v credit account titles are automatical y i dented when amount s entered. Do not ndent ma ual select Journalize the declaration o a 15% stock dividend on December 10, 2017, or the following two independent assumptions Entry" lor the account titles and enter 0 for the amounts. If no entry s requ e No (a) Par value is $10 and market price is $18. b) Par value is 5 and market price is $3 No. Account Titles and Explanation Debit Credit TEA) tib)

Explanation / Answer

Journal entry of declaration

No accounts & explanation debit credit (a) Retained earnings a/c (140000*18) 2520000 Common stock dividend distributable 1400000 Paid in capital in excess of par value 1120000 (TO record declaration of stock dividend) (b) Retained earnings a/c (250000*8) 2000000 Common stock dividend distributable 1250000 Paid in capital in excess of par value 750000 (TO record declaration of stock dividend)

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