Question

The stockholders' equity accounts of Bonita Company have the following balances on December 31, 2020. Common stock, $10 par, 326,000 shares issued and outstanding $3,260,000 Paid-in capital in excess of par-common stock 1,110,000 Retained earnings 5,930,000 Shares of Bonita Company stock are currently selling on the Midwest Stock Exchange at $36. Prepare the appropriate journal entries for each of the following cases. (Credit account titles are automatically indented when amount If no entry is required, select "No Entry" for the account titles and enter for the amounts.) (a) Astock dividend of 6% 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) Retained Earnings Common Stock Dividend Distributable

Answer 1

Journal entry

No	Account title and explanation	Debit	Credit
a1	Retained earnings (326000*6%*36)	704160
	Common Stock dividend distributable		195600
	Paid in capital in excess of par value-Common Stock		508560
a2	Common Stock dividend distributable	195600
	Common Stock		195600
b1	Retained earnings	3260000
	Common Stock dividend distributable		3260000
b2	Common Stock dividend distributable	3260000
	Common Stock		3260000
C1	No entry
	No entry
C2	No entry
	No entry