Cornerstone Exercise 10-34 (Algorithmic)
Stock Dividend
Bower Corporation reported the following information: common stock, $1 par; 100,000 shares authorized; 73,000 shares issued and outstanding.
Required:
1. What is the appropriate journal entry to record a 10% stock dividend if the market price of the common stock is $30 per share when the dividend is declared?
Retained Earnings
213,000
Common Stock
7,100
Additional Paid-In Capital-Common Stock
205,900
(Record small stock dividend)
2. what is the appropriate journal entry to record a 30% stock dividend if the market price of the common stock is $30 per share when the dividend is declared?
Retained Earnings
21,300
Common Stock
21,300
(Record large stock dividend)