Question

Martial Arts Schools, Inc. is authorized to issue 200,000 shares of $1 par common stock. The company issued 75,000 shares at $6 per share. When the market price of common stock was $8 per share, Martial Arts declared and distributed a 14% stock dividend. Later, Martial Arts declared and paid a $0.80 per share cash dividend Read the requirements Common SIOUX LIVIDEN IS Date 2 IUUU Common Stock-$1 Par Value 21000 Issued 14% stock dividend Requirement 2. Journalize the declaration and payment of the cash dividend (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Begin by joumalizing the declaration of the cash dividend Date Accounts and Explanation Debit Credit Cash Dividends Dividends Payable Common Declared a cash dividend, Now journalize the payment of the cash dividend. ♡ Date Accounts and Explanation Debit Credit Dividends Payable-Common Cash Payment of cash dividend.

Answer 1

Date	Account title	Debit	Credit
	Cash (75,000*$6)	$   450,000
	Common stock (75,000*$1)		$     75,000
	Paid in capital in excess of par		$   375,000
	(To record issuance of common stock)
	Stock Dividends (75,000*14%*$8)	$     84,000
	Common stock Dividend distributable (75,000*14%*$1)		$     10,500
	Paid in capital in excess of par		$     73,500
	(To record declaration of stock dividend)
	Common stock Dividend distributable	$     10,500
	Common stock		$     10,500
	(To record dividend distributed)
	Cash Dividends (75,000+114%)*$0.80)	$     68,400
	Dividends payable - common		$     68,400
	(Declared cash dividends)
	Dividends payable - common	$     68,400
	Cash		$     68,400
	(Payment of cash dividends)

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