Accounting for Large Stock Dividend and Stock Split Watts Corporation has 40,000 shares of $10 par value common stock ou

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Accounting For Large Stock Dividend And Stock Split Watts Corporation Has 40 000 Shares Of 10 Par Value Common Stock Ou 1 (434.46 KiB) Viewed 13 times

Accounting for Large Stock Dividend and Stock Split Watts Corporation has 40,000 shares of $10 par value common stock outstanding and retained earnings of $820,000. The company declares a 100% stock dividend. The market price at the declaration is $17 per share. a. Prepare the general journal entry for the stock dividend. If no journal entry is required, select "No entry" for your answers. General Journal Description Retained earnings Common stock No entry Description Debit 400,000 0 No entry b. Assume that the company splits its stock two shares for one share and reduces the par value from $10 to $5 rather than declaring a 100% stock dividend. How does the accounting for the stock split differ from the accounting for the 100% stock dividend? Prepare the journal entry for the stock split. If no journal entry is required, select "No entry" for your answers. General Journal Debit 200,000 * Credit 0 400,000 0 Credit 0 200,000 *