On December 31, the stockholders equity section of the balance shet of R & B Cor

Question

On December 31, the stockholders equity section of the balance shet of R & B Corporation the following: shares, outstanding 32,000 shares) s320.000 12,700 82,000 Additional On February 1 of the following year, a 11 percent stock dividend was issued. The market value of the stock on February 1 was $16 per share. Required Prepare the journal entry to record (a) the small 11 percent stock dividend and, alternatively, (b) the large 100 nt stock dividend. (If no entry is required for a transaction/event, select "No Joumal Entry Required" in the first account field.) View transaction list Journal entry worksheet Record the issue of a 11 percent stock dividend on the 32.000 shares of stock outstanding with a market value of $16 per share. Debit Credit General Journal

Explanation / Answer

Solution:

Preparing the Journal Entries to Record (a) the Small 11% Stock Dividend and Alternatively (b) The Large 100% Stock Dividend:

Transaction General Journal Debit Credit a Retained Earnings (32.000 * 10% * 16) $51,200 Common Stock $3,200 Additional Paid Up Capital $48,000 (To Record the issue of a 10 percent stock dividend on the 32,000 shares of stock outstanding with a market value of $16 per share) b Retained Earnings $320,000 Common Stock $320,000 (To Record the issue of a 100 percent stock dividend on the 32,000 shares of stock outstanding with a par value of $10 per share)

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