Question

Kinmi Financial Corporation is the parent company of kinmi Bank. The company's stock split was announced in the following wire: LOS ANGELES Jan. 20 BUSINESS WIRE-kinmi Financial Corporation (Nasdag), announced that the Board of Directors has approved a two-for-one stock split, to be effected in the form of a 100 percent common stock dividend. Kinmi Financial Corporation stockholders of record at the close of business on January 31 will receive one additional share of common stock for every share of common stock then held. Distribution of additional shares issued as a result of the split is expected to occur on or about February 15. At the time of the stock split, 30.5 million shares of common stock, $0.001 par per share, were outstanding. Required: 1. Prepare the journal entry, if any, that kinmi recorded at the time of the stock split 3. If Kinmi's stock price had been $42 at the time of the split, what would be its approximate value after the split (other things equal)? Complete this question by entering your answers in the tabs below. Required 1 Required 3 Prepare the journal entry, if any, that kinmi recorded at the time of the stock split. (If no entry is required for a transaction/event, select "No journal entry required in the first account field. Enter your answers in whole dollars.) View transaction list Journal entry worksheet Record the stock split effected in the form of a stock dividend.

Answer 1

Journal entry
Particulars			Debit	Credit
paid in capital-excess of par(30500000*0.001)			30500
common stock				30500
(to record stock split in form stock dividend)
3) value after the split (42/2) = 21

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