Homework SourseOn December 1 2015 Arther Company had 200000 shares of 1 par
On December 1, 2015, Arther Company had 200,000 shares of $1 par value common stock issued and outstanding. The day they declared and distributed a 50% stock dividend. The market value of the stock on that date was $9 per share. Provide the journal entry for the transaction.
Solution
Solution:
Outstanding shares = 200000
Par value per share = $1
Dividend declared and distributed = 50%
Dividend per share = $1*50% = $0.50
Total dividend distributed = 200000*0.50 = $100,000
| Journal Entries - Arther Company | ||
| Particular | Debit | Credit |
| Declaration of dividend: | ||
| Retained Earnings Dr | $100,000.00 | |
| To Dividend Payable A/c | $100,000.00 | |
| (Being dividend declared at $0.50 per share) | ||
| Payment of dividend: | ||
| Dividend Payable A/c Dr | $100,000.00 | |
| To Bank A/c | $100,000.00 | |
| (Being dividend payment made) |
