Gupta Corp. was authorized to issue unlimited common shares and had 452,000 common shares outstanding on 8 March 20X2, with a recorded value of $1,367,000. On this date, the board of directors declared a 5% stock dividend, valued at the fair value of shares, $4.50 per share.

Required:
Prepare journal entries for each of the following independent circumstances:
1. The stock dividend is declared and issued on 8 March, and all shares are distributed on this date.
2. The stock dividend is declared and issued on 8 March, resulting in the issuance of a number of whole shares but also entitlement to the sum of 1,600 shares as fractional shares.
These shares were outstanding until 30 April, at which time 70% were redeemed for whole shares and 30% expired.
3. The stock dividend is declared and issued on 8 March, resulting in the issuance of a number of whole shares but also involving entitlement to the sum of 1,600 shares as fractional shares. Cash was distributed to shareholders in lieu of fractional shares.
4. The stock dividend is declared on 8 March, and distributed on 8 April. The dividend is recorded on 8 March. On distribution on 8 April, whole shares are issued as well as entitlement to the sum of 1,600 shares as fractional shares. These fractional shares were outstanding until 30 April, at which time 70% were redeemed for whole shares and 30% expired.
5. Comment on the differences between requirements 2 and 3. What might be the advantages and disadvantages of issuing cash instead of fractional shares?