Answer Happy

Healthy Life Co. is an HMO for businesses in the Fresno area.
The following account balances appear on Healthy Life’s balance
sheet: Common stock (430,000 shares authorized ; 4,000
shares issued), $100 par, $400,000; Paid-In
Capital in excess of par—common stock, $80,000;
and Retained earnings, $3,600,000. The board of directors
declared a 2% stock dividend when the market price of
the stock was $128 a share. Healthy Life reported no
income or loss for the current year.
If no entry is required, select "No entry required" and leave
the amount boxes blank. If an amount box does not require an entry,
leave it blank.
Question Content Area
a1. Journalize the entry to record the
declaration of the dividend, capitalizing an amount equal to
market value.
CashNo Entry RequiredPaid-In Capital in Excess of Par-Common
StockStock DividendsStock Dividends Distributable
CashNo Entry RequiredStock DividendsStock Dividends
DistributableTreasury Stock
CashCommon StockNo Entry RequiredPaid-In Capital in Excess of
Par-Common StockStock Dividends
Question Content Area
a2. Journalize the entry to record the
issuance of the stock certificates.
Common StockNo Entry RequiredPaid-In Capital in Excess of
Par-Common StockStock DividendsStock Dividends Distributable
Common StockNo Entry RequiredPaid-In Capital in Excess of
Par-Common StockStock DividendsStock Dividends Distributable
Question Content Area
b. Determine the following amounts before
the stock dividend was declared: (1) total paid-in capital, (2)
total retained earnings, and (3) total stockholders'
equity.
c. Determine the following amounts after
the stock dividend was declared and closing entries were recorded
at the end of the year: (1) total paid-in capital, (2) total
retained earnings, and (3) total stockholders' equity.