The ordinary shares of Warner Inc. are currently selling at $110 per share. The directors wish to
Question:
The ordinary shares of Warner Inc. are currently selling at $110 per share. The directors wish to reduce the share price and increase share volume prior to a new issue. The per share par value is $10; book value is $70 per share. Five million shares are issued and outstanding.
Instructions
Prepare the necessary journal entries assuming the following.
(a) The board votes a 2-for-1 share split.
(b) The board votes a 100% share dividend.
(c) Briefly discuss the accounting and securities market differences between these two methods of increasing the number of shares outstanding.
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...
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Step by Step Answer:
a No entrysimply a memorandum note indicating the number of shares has increased to 10 m...View the full answer
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Related Book For 
Intermediate Accounting
ISBN: 978-0470616314
IFRS edition volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
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