Question

Selected Dividend Transactions, Stock Split

Selected transactions completed by Canyon Ferry Boating Corporation during the current fiscal year are as follows.

Journalize the transactions.

If no entry is required, select "No Entry Required" and leave the amount boxes blank. If an amount box does not require an entry, leave it blank.

Jan. 8. Split the common stock 3 for 1 and reduced the par from $42 to $14 per share. After the split, there were 111,000 common shares outstanding.

Jan. 8	No Entry Required

Apr. 30. Declared semiannual dividends of $1.20 per share on 8,000 shares of preferred stock and $0.09 per share on the common stock payable on July 1.

Apr. 30	Cash Dividends

July 1. Paid the cash dividends.

July 1

Oct. 31. Declared semiannual dividends of $1.20 per share on the preferred stock and $0.06 per share on the common stock (before the stock dividend). In addition, a 2% common stock dividend was declared on the common stock outstanding. The fair market value of the common stock is estimated at $25.

Oct. 31
Oct. 31

Dec. 31. Paid the cash dividends and issued the certificates for the common stock dividend.

Dec. 31	Cash Dividends Payable
Dec. 31

Answer 1

Date	Account title and explanation	Debit	Credit
Jan 8	No Entry for stock split
Apr 30	Cash dividends	$39,570
	Dividends payable-Preferred [8,000 x $1.20]		$9,600
	Dividends payable-Common [333,000* x $0.09]		$29,970
	[To record declaration of cash dividends]
July 1	Dividends payable-Preferred	$9,600
	Dividends payable-Common	$29,970
	Cash		$39,570
	[To record payment of cash dividends]
Oct 31	Cash dividends	$29,580
	Dividends payable-Preferred [8,000 x $1.20]		$9,600
	Dividends payable-Common [333,000 x $0.06]		$19,980
	[To record declaration of cash dividends]
Oct 31	Stock dividends [333,000 x 2% x $25]	$166,500
	Stock dividends distributable [333,000 x 2% x $14 par]		$93,240
	Paid-in capital in excess of par		$73,260
	[To record declaration of stock dividends]
Dec 31	Dividends payable-Preferred	$9,600
	Dividends payable-Common	$19,980
	Cash		$29,580
	[To record payment cash dividends]
Dec 31	Stock dividends distributable	$93,240
	Common stock		$93,240
	[To record issuance of stock dividends]

*Share after stock split = 111,000 x 3 = 333,000 shares