Problem

Journalizing cash and stock dividends [10-15 min]Painting Schools, Inc., is authorized to...

Journalizing cash and stock dividends [10-15 min]

Painting Schools, Inc., is authorized to issue 200,000 shares of $1 par common stock. The company issued 77,000 shares at $3 per share. When the market price ofcommon stock was $5 per share, Painting distributed a 10% stock dividend. Later,Painting declared and paid a $0.25 per share cash dividend.

Requirements

1. Journalize the distribution of the stock dividend.


2. Journalize both the declaration and the payment of the cash dividend.

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