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Mustang Corporation had 100,000 shares of $2 par value common stock outstanding. On December 31, 2018, the company's board of directors declares a 20 percent stock dividend. This stock dividend will be distributed on January 20, 2019 to the stockholders of record on January 15, 2019. The market price of the company's stock is $10 per share on December 31, 2018.
Complete the necessary journal entry to record the declaration of the stock dividend by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns
list Journal entry worksheet
Mustang Corporation had 100,000 shares of $2 par value common stock outstanding On December 31, 2018, the company's board of directors declares a 20 percent stock dividend. This stock dividend will be distributed on January 20, 2019 to the stockholders of record on January 15, 2019. The market price of the company's stock is $10 per share on December 31, 2018
Note Enter debit before credits
Date General Journal Debit Credit
Dec 31
Record entry Clear entry View General journal

Sagot :

abiolataiwo2015

Answer:

1. Dec 31, 2018

Dr Retained Earnings $200,000

Cr Common Stock dividend distributable $40,000

Cr Paid in Capital in Excess of par $160,000

2. Jan 15 , 2019

No Journal Entry is required

3. Jan 20 , 2019

Dr Common Stock dividend distributable $40,000

Cr Common Stock $40,00

Explanation:

Preparation of the necessary journal entry to record the declaration of the stock dividend

1. Dec 31, 2018

Dr Retained Earnings $200,000

(100,000 Shares * 20%* $ 10)

Cr Common Stock dividend distributable $40,000

(100,000 Shares * 20%* $2)

Cr Paid in Capital in Excess of par $160,000

($ 200,000 - $ 40,000 )

2. Jan 15 , 2019

No Journal Entry is required

3. Jan 20 , 2019

Dr Common Stock dividend distributable $40,000

Cr Common Stock $40,000

(100,000 Shares * 20%* $2)

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