Question

Chapter 18-2. On June 13, the board of directors of Siewert Inc. declared a 2-for-1 stock split on its 60 million, $1 par, common shares, to be distributed on July 1. The market price of Siewert common stock was $27 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?

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, type “No journal entry required” in the first account field.)

Record the stock split.

Note: Enter debits before credits.

Event	General Journal	Debit	Credit
1

What is the par per share after the split? (Enter your answer in dollars rounded to 2 decimal places.)

Par value = __________________ per share

Answer 1

In stock split, value will not change. In this only the number of shares outstanding changes and the par value per share is reduced. Hence. No accounting entry is required in the stock split.

Event	General Journal	Debit	Credit
1	No journal entry required
	No journal entry required
	(No entry is required for stock split)

2-for-1 stock split means that for each share of $1 par value will be replaced by 2 shares of $0.50 par value. Par per share after the split is $0.50 per share [$1/2]