In: Accounting
The stockholders’ equity accounts of Bridgeport Company have the
following balances on December 31, 2020.
Common stock, $10 par, 298,000 shares issued and outstanding | $2,980,000 | |
Paid-in capital in excess of par—common stock | 1,280,000 | |
Retained earnings | 5,840,000 |
Shares of Bridgeport Company stock are currently selling on the
Midwest Stock Exchange at $35.
Prepare the appropriate journal entries for each of the following
cases. (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.)
(a) | A stock dividend of 8% is (1) declared and (2) issued. | |
---|---|---|
(b) | A stock dividend of 100% is (1) declared and (2) issued. | |
(c) | A 2-for-1 stock split is (1) declared and (2) issued. |
No. |
Account Titles and Explanation |
Debit |
Credit |
---|---|---|---|
(a) (1) |
enter an account title for case A to record the declaration of stock dividends |
enter a debit amount |
enter a credit amount |
enter an account title for case A to record the declaration of stock dividends |
enter a debit amount |
enter a credit amount |
|
enter an account title for case A to record the declaration of stock dividends |
enter a debit amount |
enter a credit amount |
|
(a) (2) |
enter an account title for case A to record the issuance of stock dividends |
enter a debit amount |
enter a credit amount |
enter an account title for case A to record the issuance of stock dividends |
enter a debit amount |
enter a credit amount |
|
(b) (1) |
enter an account title for case B to record the declaration of stock dividends |
enter a debit amount |
enter a credit amount |
enter an account title for case B to record the declaration of stock dividends |
enter a debit amount |
enter a credit amount |
|
(b) (2) |
enter an account title for case B to record the issuance of stock dividends |
enter a debit amount |
enter a credit amount |
enter an account title for case B to record the issuance of stock dividends |
enter a debit amount |
enter a credit amount |
|
(c) (1) |
enter an account title for case C to record the declaration of the stock split |
enter a debit amount |
enter a credit amount |
enter an account title for case C to record the declaration of the stock split |
enter a debit amount |
enter a credit amount |
|
(c) (2) |
enter an account title for case C to record the issuance of the stock split |
enter a debit amount |
enter a credit amount |
enter an account title for case C to record the issuance of the stock split |
enter a debit amount |
enter a credit amount |
Answer:
No. | Account title and Explanation | Debit | Credit |
(a)1 | Retained earnings [(298,000 x 8%) x $35 market rate] | $834,400 | |
Common stock dividend distributable [(298,000 x 8%) x $10 par] | $238,400 | ||
Paid-in capital in excess of par-Common | $596,000 | ||
[To record declaration of stock dividends] | |||
(a)2 | Common stock dividend distributable | $238,400 | |
Common stock | $238,400 | ||
[To record issuance of stock dividends] | |||
(b)1 | Retained earnings [(298,000 x 100%) x $10 par] | $2,980,000 | |
Common stock dividend distributable | $2,980,000 | ||
[To record declaration of stock dividends] | |||
(b)2 | Common stock dividend distributable | $2,980,000 | |
Common stock | $2,980,000 | ||
[To record issuance of stock dividends] | |||
(c )1 | No Entry for stock-split declared | ||
(c )2 | No Entry for stock-split issued |