2. Stock Dividend - A corporation has 80,000 shares of $5 par value common stock outstanding. At year-end, the company declares a five percent stock dividend. The market price of the stock on the declaration date is $20 per share. Required: a) Prepare the journal entry to declare and issuance the above stock dividend. b) Assume that the company declared a 30 percent stock dividend rather than a five percent stock dividend. Prepare the journal entry to declare and issuance the above stock dividend.

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter16: Retained Earnings And Earnings Per Share
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**Stock Dividend**

A corporation has 80,000 shares of $5 par value common stock outstanding. At year-end, the company declares a five percent stock dividend. The market price of the stock on the declaration date is $20 per share.

**Required:**

a) Prepare the journal entry to declare and issue the above stock dividend.

b) Assume that the company declared a 30 percent stock dividend rather than a five percent stock dividend. Prepare the journal entry to declare and issue the above stock dividend.
Transcribed Image Text:**Stock Dividend** A corporation has 80,000 shares of $5 par value common stock outstanding. At year-end, the company declares a five percent stock dividend. The market price of the stock on the declaration date is $20 per share. **Required:** a) Prepare the journal entry to declare and issue the above stock dividend. b) Assume that the company declared a 30 percent stock dividend rather than a five percent stock dividend. Prepare the journal entry to declare and issue the above stock dividend.
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