Painting schools Inc. is authorized to issue 200,000 shares of $2 par common sto

Question

Painting schools Inc. is authorized to issue 200,000 shares of $2 par common stock. The company issued 79,000 shares at $4 per share. When the market price of common stock was $6 Per share, painting declared and distributed a 10% stock dividend. Later, painting declared and paid a $0.80 Per share cash dividend. Journalize the declaration and the distribution of the stock dividend. Painting schools Inc. is authorized to issue 200,000 shares of $2 par common stock. The company issued 79,000 shares at $4 per share. When the market price of common stock was $6 Per share, painting declared and distributed a 10% stock dividend. Later, painting declared and paid a $0.80 Per share cash dividend. Journalize the declaration and the distribution of the stock dividend.

Explanation / Answer

Journal entry :

Date account & explanation debit credit Stock dividend (79000*10%*6) 47400      Common Stock dividend distributable 31600       paid in capital in excess of par value-Common Stock 15800 (To record Stock dividend declared) Common Stock dividend distributable 47400     Common Stock 47400 (To record stock dividend distributed)

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