The following data were taken from the balance sheet account

The following data were taken from the balance sheet accounts of Marigold Corporation on December 31, 2016. Current assets Debt investments Common stock (par value $10) Paid-in capital in excess of par Retained earnings $575,000 567,000 535,000 139,000 802,000 Prepare the required journal entries for the following unrelated items. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select \"No Entry\" for the account titles and enter o for the amounts.) (a) A 5% stock dividend is (1) declared and (2) distributed at a time when the market price per share is $39. (b) The par value of the common stock is reduced to $2 with a 5-for-1 stock split. (c) A dividend is declared January 5, 2017, and paid January 25, 2017, in bonds held as an investment. The bonds have a book value of $101,000 and a fair value of $134,000. | Date Account Titles and Explanation Debit Credit No. (a) (1) (a) (2) (b) (c) (To record change in value of bonds) (To record the declaration of dividends)

Solution

Date Account Title Debit credit a.1. Retained earnings 104325 Stock dividend distributable * 104325 (Declaration of 5% of stock dividend @$39 per share) a.2 Stock dividend distributable 104325 Common Stock ($10 par) 26750 Additional paid-in-capital 77575 b Common Stock ($10 par) 561750 Common Stock ($2 par) 561750 (Issue of 280,875 shares of $2 par inplace of $5 par shares) c Jan.5,2017 Investment in bonds 33000 Unrealized gain on investments 33000 (To record the increas in the book value of the bonds) Retained earnings 134000 Dividend Distrubutable 134000 (Declataion of dividend in bonds held as investment) Jan.25, 2017 Dividend Distrubutable 134000 Investment in bonds 134000 (Payment of dividend in bonds delcared on Jan.15, 2017) Common Stock ($10 par value)                   535,000 Number of shares        (535,000 / 10)             53,500 Stock Dividend Declared                                       5% Number of shares            (5% of 53,500)          2,675 Market price of share                                            $39 Value of stock dividend     (2,675 x 39)           104,325   *