Question

Exercise 15-14

The stockholders’ equity accounts of Sunland Company have the following balances on December 31, 2020.

Common stock, $10 par, 290,000 shares issued and outstanding		$2,900,000
Paid-in capital in excess of par—common stock		1,120,000
Retained earnings		5,110,000

Shares of Sunland 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 is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

(a)		A stock dividend of 7% 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.

Debit Credit No. Account Titles and Explanation (a) (1) (a) (2) (b) (1) (b) (2) (C) (1) (C) (2)

Answer 1

Journal entry

No	General Journal	Debit	Credit
a1)	Stock dividend (290000*7%*36)	730800
	Common Stock dividend distributable		203000
	Paid in capital in excess of par value-Common Stock		527800
a2)	Common Stock dividend distributable	203000
	Common Stock		203000
b1)	Stock dividend	2900000
	Common Stock dividend distributable		2900000
b2)	Common Stock dividend distributable	2900000
	Common Stock		2900000
C1)	No Journal entry
C2)	No Journal entry