Martial Arts schools, inc. authorized to issue 500,000 sharesof $1 par common st

Question

Martial Arts schools, inc. authorized to issue 500,000 sharesof $1 par common stock. The company issued 80,000 at $4 per share.WHen the market price of common stock was $6 per share, MartialArts distributed a 10% stock dividend. Later, Martial Arts declaredand paid a $.30 per share cash dividend. Just journalize the both declaration AND payment of cashdividend only 2 entries. THANKS WILL RATE 6 Martial Arts schools, inc. authorized to issue 500,000 sharesof $1 par common stock. The company issued 80,000 at $4 per share.WHen the market price of common stock was $6 per share, MartialArts distributed a 10% stock dividend. Later, Martial Arts declaredand paid a $.30 per share cash dividend. Just journalize the both declaration AND payment of cashdividend only 2 entries. THANKS WILL RATE 6

Explanation / Answer

1

2

Issued 80,000 shares anddeclared and paid a$0.30 per share cash dividend. JOURNAL ENTRY At the Time ofDecleration

1

Retained Earnings(cash dividend declared) $24,000              Dividends Payable $24,000 ($0.30 X 80,000 Shares) At the Time of Payment

2

Dividends Payable $24,000               Cash $24,000

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