Stock Dividends Witt 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. Four weeks later, the company issues the shares of stock to stockholders.a. Prepare the journal entry for the declaration of the stock dividend.b. Prepare the journal entry for the issuance of the stock dividend.c. Assume that the company declared a 30 percent stock dividend rather than a five percent stock dividend. Prepare the journal entries for (1) the declaration of the stock dividend and (2) the issuance of the stock dividend. General Journal Ref. Description Debit Credit a. Answer Answer Answer   Answer Answer Answer   Paid-in-Capital in Excess of Par Value Answer Answer   To record declaration of stock dividend.     b. Answer Answer Answer   Answer Answer Answer   Issued common stock for stock dividend.     c. 1) Answer Answer Answer   Answer Answer Answer   To record declaration of stock dividend.     c. 2) Answer Answer Answer   Answer Answer Answer   Issued common stock for stock dividend.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Stock Dividends

Witt 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. Four weeks later, the company issues the shares of stock to stockholders.

a. Prepare the journal entry for the declaration of the stock dividend.
b. Prepare the journal entry for the issuance of the stock dividend.
c. Assume that the company declared a 30 percent stock dividend rather than a five percent stock dividend. Prepare the journal entries for (1) the declaration of the stock dividend and (2) the issuance of the stock dividend.

General Journal
Ref. Description Debit Credit
a. Answer Answer Answer
  Answer Answer Answer
  Paid-in-Capital in Excess of Par Value Answer Answer
  To record declaration of stock dividend.    
b. Answer Answer Answer
  Answer Answer Answer
  Issued common stock for stock dividend.    
c. 1) Answer Answer Answer
  Answer Answer Answer
  To record declaration of stock dividend.    
c. 2) Answer Answer Answer
  Answer Answer Answer
  Issued common stock for stock dividend.    
 
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