Global Corporation had 46,000 shares of $20 par value common stock outstanding o

Question

Global Corporation had 46,000 shares of $20 par value common stock outstanding on July 1. Later that day the board of directors declared a 25% stock dividend when the market value of each share was $27, The entry to record this dividend is: O Debit Retained Earnings $310,500; credit Common Stock Dividend Distributable $310,500. O Debit Retained Earnings $310,500: credit Cash $310.500 O Debit Retained Earnings $230,000, credit Common Stock Dividend Distributable $230.000. O No entry is made until the stock is issued. O Debit Retained Earnings $310,500; credit Common Stock Dividend Distributable $230,000 credit Paid-in Capital in Excess of Par Value, Common Stock $80,500

Explanation / Answer

1)

1)Retained Earnings 310500 To Common Stock dividend distributable 230000 To Paid in capital in excess of PAr value 80500 2) Retained Earnings 65280 To Common Stock dividend distributable 40800 To Paid in capital in excess of PAr value 24480 3) Retained Earnings 26600 To Common Dividends payable 26600

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