1. Boehm Rest Company has 30,000 shares of its $1 par value common stock outstan

Question

1.            Boehm Rest Company has 30,000 shares of its $1 par value common stock outstanding. Record in journal form the following transactions as they relate to the company%u2019s common stock:

July 17     Declared a 10 percent stock dividend on common stock to be distributed

                  on August 10 to stockholders of record on July 31. Market value of the

                  stock was $5 per share on this date.

Aug. 10    Distributed the stock dividend declared on July 17.

Sept. 1      Declared a $0.50 per share cash dividend on common stock to be paid on

                  September 16 to stockholders of record on September 10.

...

Explanation / Answer

Hi,

Please find the answer as follows:

July 17

Retained Earnings Dr. (3000*5) 15000

Common Stock Dividend Distributable Cr. (3000*1) 3000

Paid in Capital in Excess of Par Cr. (3000*4) 12000

August 10

Common Stock Dividend Distributable Dr. 3000

Common Stock Cr. 3000

September 1

Retained Earnings Dr. (33000*.50) 16500

Dividends Payable Cr. 16500

September 10

No Journal Entry Needed

September 16

Dividends Payable Dr. 16500

Cash Cr. 16500

Thanks.

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