Journalize the following selected transactions completed during the current fisc

Question

Journalize the following selected transactions completed during the current fiscal year: Jan. 3 The board of directors reduced the par of common shares from $100 to $20. This action increa 22 Feb. 8 Sep. 1 the number of outstanding shares to 400,000. Declared a dividend of $2.00 per share on the outstanding shares of common st Paid the dividend declared on January 22. Declared a 5% stock dividend on the common stock outstanding (the fair market value of the oo stock to be issued is $30). Oct. 1 Issued the certificates for the common stock dividend declared on September 1.

Explanation / Answer

In the books of :

Date Account Titles Debit Credit $ $ Jan 3 No journal entry required 0 0 Jan 22 Retained Earnings ( 400,000 x $ 2) 800,000 Dividends Payable: Common Stock 800,000 Feb 8 Dividends Payable: Common Stock 800,000 Cash 800,000 Sep 1 Retained Earnings ( 400,000 x 5%) x $ 30 600,000 Common Stock Dividend Distributable ( 400,000 x 5%) x $ 20 400,000 Paid-In Capital in Excess of Par : Common Stock 200,000 Oct 1 Common Stock Dividend Distributable 400,000 Common Stock 400,000

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