E15.13 (LO 3) (Stock Split and Stock Dividend) The common stock of Alexander Hamilton Inc. is...

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E15.13 (LO 3) (Stock Split and Stock Dividend) The common stock of Alexander Hamilton Inc. is currently selling at $120 per share. The directors wish to reduce the share price and increase share vol- ume prior to a new issue. The per share par value is $10; book value is $70 per share. Nine million shares are issued and outstanding. Instructions Prepare the necessary journal entries assuming the following. a. The board votes a 2-for-1 stock split. b. The board votes a 100% stock dividend. c. Briefly discuss the accounting and securities market differences between these two methods of in- creasing the number of shares outstanding. E15.14 (LO 3) (Entries for Stock Dividends and Stock Splits) The stockholders' equity accounts of G.K. Chesterton Company have the following balances on December 31, 2020. Common stock, $10 par, 300,000 shares issued and outstanding Paid-in capital in excess of par-common stock Retained earnings $3,000,000 1,200,000 5,600,000 Shares of G.K. Chesterton Company stock are currently selling on the Midwest Stock Exchange at $37. Instructions Prepare the appropriate journal entries for each of the following cases. a. A stock dividend of 5% is declared and issued. b. A stock dividend of 100% is declared and issued. c. A 2-for-1 stock split is declared and issued. E15.13 (LO 3) (Stock Split and Stock Dividend) The common stock of Alexander Hamilton Inc. is currently selling at $120 per share. The directors wish to reduce the share price and increase share vol- ume prior to a new issue. The per share par value is $10; book value is $70 per share. Nine million shares are issued and outstanding. Instructions Prepare the necessary journal entries assuming the following. a. The board votes a 2-for-1 stock split. b. The board votes a 100% stock dividend. c. Briefly discuss the accounting and securities market differences between these two methods of in- creasing the number of shares outstanding. E15.14 (LO 3) (Entries for Stock Dividends and Stock Splits) The stockholders' equity accounts of G.K. Chesterton Company have the following balances on December 31, 2020. Common stock, $10 par, 300,000 shares issued and outstanding Paid-in capital in excess of par-common stock Retained earnings $3,000,000 1,200,000 5,600,000 Shares of G.K. Chesterton Company stock are currently selling on the Midwest Stock Exchange at $37. Instructions Prepare the appropriate journal entries for each of the following cases. a. A stock dividend of 5% is declared and issued. b. A stock dividend of 100% is declared and issued. c. A 2-for-1 stock split is declared and issued.

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ANSWER For E1513 a 2for1 Stock Split When a 2for1 stock split is declared and issued the number of shares outstanding doubles and the par value per sh... View the full answer