Question

Zurich Corporation has 21,000 shares of $30 par common stock outstanding. On June 8, Zurich Corporation declared a 2% stock dividend to be issued August 12 to stockholders of record on July 13. The market price of the stock was $45 per share on June 8. Journalize the entries required on June 8, July 13, and August 12. For a compound transaction, if an amount box does not require an entry, leave it blank. If no entry is required, select "No Entry Required" and leave the amount boxes blank.

Answer 1

• All working forms part of the answer
• Working #1

No. of shares outstanding		21000
Stock dividend rate		2%
No. of shares distributable as stock dividend		420
Market price on June 8		$                       45.00
Amount of Stock dividend		$               18,900.00
Common Stock [ 420 shares x $ 30]	$                             12,600.00
Additional Paid in Capital in excess of Par - Common Stock [ 420 shares x $ 15]	$                               6,300.00
Total Stock dividend distributed		$               18,900.00

• Journal Entries based on above

Date	Accounts title	Debit	Credit
Jun-08	Dividends	$                             18,900.00
	Dividend distributable		$               18,900.00
	(dividend declared)
Jul-13	No Entry
Aug-12	Dividend distributable	$                             18,900.00
	Common Stock		$               12,600.00
	Paid in Capital in excess of Par - Common Stock		$                 6,300.00
	(stock dividend distributed)