On June 6, 2012, Universal Bioenergy, Inc. declared a 20% stock dividend. Because it is a 20% dividend, Universal Bioenergy had flexibility to account for this as a small or large stock dividend. Its common stock was trading at $ 0.01 per share at that time. Excerpts from its 10- K are provided below.

1. What journal entry did Universal Bioenergy record on June 6? What journal entry did it record on July 20? Did Universal Bioenergy account for this stock dividend as a small stock dividend or a large stock dividend? You may find ASC 505- 20- 30- 5 helpful in understanding this entity€™s approach.
2. What would be the impact on the accounts if Universal Bioenergy did not use the alternative treatment permitted for closely held entities?
3. What would be the impact on the accounts if Universal Bioenergy did not use the alternative treatment permitted for closely held entities and chose a different basic treatment? That is, if Universal Bioenergy recorded it as a small stock dividend, how would the accounts change?
Discussion of the stock dividend included in ITEM 1 in the 10- K:
Approval of Stock Dividend*

UNIVERSAL BIOENERGY, INC CONSOLIDATED BALANCE SHEETS Assets: CurrentAssets: Cash Accounts receivable Other loans Total current assets December 31, 2012 December 31, 2011 2,274 4,900,967 600 4,803,841 3.706 10,004,123 10,007,829 Property and Equipment Other Assets: Accounts receivable other Investments Intangible assets Deposit Total other assets net 6.989 8,951 10,050 2,919,500 250,000 7453 3,187003 10,050 889,500 250,000 46.516 1,196,066 Total Assets Liabilities and Stockholders' Equity (Deficit) Current Liabilities: Accounts payable Other accounts payable andaccrued expenses Accrued interest payable Line of credit Current portion of long term debt Derivative liability Advances from affiliates Total current liabilities Long-term Debt Notes payable Notes payable related parties Total Long-term Debt Total Liabilities $ 7997832 S 11,212.846 S 4.983.318 185,422 468,572 7942 248.395 350,237 4,250 6,248,136 S 10,099,502 208.848 101,860 7850 172,560 4,250 10,594,870 $ 2,261,406 934.729 3,196,134 9,444,270 $ 131,086 191.000 322,086 10,916,956 Liabilities and Stockholders' Equity (Deficit) Current Liabilities: Accounts payable Other accounts payable and accrued expenses Accrued interest payable Line of credit Current portion of long term debt Derivative liability Advances from affiliates Total current liabilities Long-term Debt Notes payable Notes payable related parties Total Long-term Debt Total Liabilities $ 4,983,318 185,422 468,572 7942 248,395 350,237 4,250 6,248,136 S 10,099,502 208.848 101,860 7850 172,560 4.250 10,594,870 $ 2,261,406 934,729 3,196,134 9,444,270 $ 131.086 191,000 322,086 10.916,956 Liabilities and Stockholders Equity (Deficit) Preferred stock, $.001 par value, 10,000,000 shares authoizad. Preferred stock Series A, zero issued and outstanding shares December 31. 2012 and December 31, 2011, respectively Preferred stock Series B, 232,080 issued and outstanding shares December 31, 2012 and December 31, 2011 respectively Common stock, $.001 par value, 3,000,000,000 shares authorized: 673,521,813 and 199,969,927 issued and outstanding as of December 31, 2012 and December 31, 20, respectively Additional paid-in capital Noncontrolling interest Accumulated deficit December 31, 2012 December 31, 2011 232 232 673,522 20,546,023 (263,836 22,402,379) 1,466,438) 199,970 19,111.601 (125,543) 18.990.370) 295.890 Total stockholders equity (deficit Total Liabilities and Stockholders' Equity S 799782 S 11,212.846