Question

On June 13, the board of directors of Siewert Inc. declared a 2-for-1 stock split on its 50 million, $10 par, common shares, to be distributed on July 1. The market price of Siewert common stock was $26 on June 13. Prepare the journal entry to record the stock split if it is not to be effected in the form of a stock dividend. What is the par per share after the split? Complete this question by entering your answers in the tabs below. General Journal Par value Prepare the journal entry to record the stock split if it is not to be effected in the form of a stock dividend. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) View transaction list Journal entry worksheet Record the stock split. Note: Enter debits before credits. Event General Journal Debit 5001 Credit 500 Record entry Clear entry View general journal < General Journal Par value >

Answer 1

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If there is a stock split but not in form of stock dividend then there is no journal entry. Only number of common stock and par value per share will change. There will be no change in total par value of common stock. The details are below:
Total Par value of shares before split	$ millions
Number of Common Shares	50.00
Par value per share	10.00
Total Par value of shares before split	500.00
Effect of stock split
Number of Common Shares	50.00
Stock split ratio	2:1	It means an additional one share is given against each share held.
Number of shares in split	50.00
Number of Common Shares after stock split	100.00
Total Par value of shares	500.00	As it is already mentioned above that there will be no change in total par value of common stock.
Par value per share	5.00
Only presentation in balance sheet will change as shown below:
Before split	$ millions	After split	Amount $
Stockholder's Equity		Stockholder's Equity
Common stock $ 10 par, 50 million shares issued and outstanding	500.00	Common stock $ 5 par, 100 million shares issued and outstanding	500.00