The stockholders equity accounts of Lawrence Company have the following balances on December 31, 2010. Common stock,

Question:

The stockholders’ equity accounts of Lawrence Company have the following balances on December 31, 2010.

Common stock, $10 par, 200,000 shares issued and outstanding............$2,000,000

Paid-in capital in excess of par.........................................................................1,200,000

Retained earnings..............................................................................................5,600,000

Shares of Lawrence Company stock are currently selling on the Midwest Stock Exchange at $37. 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.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...