Entries for A distribution of shares of stock to its stockholders.Stock Dividend

Question

Entries for A distribution of shares of stock to its stockholders.Stock Dividends

Zurich Corporation has 15,000 shares of $30 The monetary amount printed on a stock certificate.par The stock outstanding when a corporation has issued only one class of stock.common stock outstanding. On June 8, Zurich Corporation declared a 3% stock dividend to be issued August 12 to The owners of a corporation.stockholders of record on July 13. The market price of the Shares of ownership of a corporation.stock was $42 per share on June 8.

Journalize the entries required on June 8, July 13, and August 12.

Explanation / Answer

Journal entry

8th June          Dividend      A/c    Dr.         $13500

                              To dividend payable A/c            $ 13500

                       (Dividend declared by the company)

13th July         NO entry Required

12th Aug           Dividend payable    A/c     Dr.      $13500

                                  To Cash A/c                                    $13500

                       (Dividend paid to the owners)

Note = Dividend is calulated on par value therefore (15000*30 ) *3 % i.e. $ 13500

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