4 Senior Life Co. is an HMO for businesses in the Portland area. The following account balances appear on the balance sheet of Senior Life Co.: Common stock (800,000 shares orta authorized; 500,000 shares issued), $4 par, $2,000,000; Paid-in capital in excess of par- common stock, $1,000,000; and Retained earnings, $33,500,000. The board of directors declared a 2% stock dividend when the market price of the stock was $13 a share. Senior Life Co. reported no income or loss for the current year. a. Journalize the entries to record (1) the declaration of the dividend, capitalizing an amount equal to market value, and (2) the issuance of the stock certificates.

4 Senior Life Co. is an HMO for businesses in the Portland area. The following account balances appear on the balance sheet of Senior Life Co.: Common stock (800,000 shares orta authorized; 500,000 shares issued), $4 par, $2,000,000; Paid-in capital in excess of par- common stock, $1,000,000; and Retained earnings, $33,500,000. The board of directors declared a 2% stock dividend when the market price of the stock was $13 a share. Senior Life Co. reported no income or loss for the current year. a. Journalize the entries to record (1) the declaration of the dividend, capitalizing an amount equal to market value, and (2) the issuance of the stock certificates.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Stockholder's Equity

The stockholders’ equity (often referred to as the book value of the company) is the number of assets available to the stockholder after its entire liabilities is paid off. The stockholders’ equity is also sometimes referred to as owner's equity. The stockholders’ equity or book value generally includes common stock, treasury stock retained earnings. It is an indicator of a company's financial strength and is an important item on the company's balance sheet.

Question

A) Journalize the entries to record (1) the declaration of the dividend, capitalizing an amount equal to market value, and (2) the issuance of the stock certificates.

4
Senior Life Co. is an HMO for businesses in the Portland area. The following account
balances appear on the balance sheet of Senior Life Co.: Common stock (800,000 shares
orta
authorized; 500,000 shares issued), $4 par, $2,000,000; Paid-in capital in excess of par-
common stock, $1,000,000; and Retained earnings, $33,500,000. The board of directors
declared a 2% stock dividend when the market price of the stock was $13 a share. Senior
Life Co. reported no income or loss for the current year.
a. Journalize the entries to record (1) the declaration of the dividend, capitalizing an
amount equal to market value, and (2) the issuance of the stock certificates.

Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

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