Brief Exercise 11-8 Langley Corporation has 50,000 shares of $10 par value commo

Question

Brief Exercise 11-8 Langley Corporation has 50,000 shares of $10 par value common stock outstanding. It declares a 15% stock dividend on December 1 when the market price per share is $16. The dividend shares are issued on December 31. Prepare the entries for the declaration and issuance of the stock dividend. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 1 Dec. 31

Explanation / Answer

Journal Entries for the declaration and issuance of Stock Dividend of Langley Corporation Date Account Titles and Explanation Debit Credit December, 1 Retained Earnings a/c          120,000 (Note 1) To Common Stock Dividend distributable a/c             75,000 (Note 2) Paid-in capital in Excess of Par a/c             45,000 (Note 3) (Divident declared) December, 31 Common Stock Dividend distributable a/c            75,000 To Common Stock a/c             75,000 (Declared divident distributed to stockholders) # This is to be considered as small stock divident Note 1 Retained Earnings (50,000*$16*15%) 120,000 Note 2 Common Stock Dividend distributable (50,000*$10*15%) 75,000 Note 3 Paid-in capital in Excess of Par (50,000*$6*15%) 45,000

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