ezto.mheducation.com Question 2 (of 25) 2. 10.00 points On June 13, the board of
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ezto.mheducation.com Question 2 (of 25) 2. 10.00 points On June 13, the board of directors of Siewert Inc. declared a 2-for-1 stock split on its 120 milion, $1 par common shares, to be distributed on July 1. The market pro of Siewert common stock was Sas onne Prepare the journal entry to record the stock split if it is not to be efected in the form of a stock dividend. (I no entry is required for a transactionlevent, select "No journal entry required" in the first account Journal entry worksheet Record the stock split Note: Enter debits before credits General Journal DebitCredit Record entry view general journal 4 s lockExplanation / Answer
1.SELECT NO JOURNAL ENTRY REQUIRED.
since the stock split is not to be affected in the from of a stock dividend, no entry is required.
In other words none of the account balances are affected due to the stock split.
Only the number of shares increase and the par value per share reduces in case of stock split.
In this case,since it is a 2 for 1 stock split, 2 shares will be given in place of each existing share.
=>120 million existing shares will become =>120 million * 2 =>240 million shares.
2nd part:
par vaue per share after the split = current par value * (1/ 2)......(since we have 2 for 1 split par value is multiplied by 1/2).
=>$1 * (1/2) =>$0.50.
Par value = $0.50 per share.
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