On December 31, the stockholders’ equity section of the balance sheet of R & B Corporation reflected the following:

Common stock (par $10; authorized 60,000 shares, outstanding 24,000 shares)……… $240,000

Additional paid-in capital………………………………………………………………………………………..…….. 11,900

Retained earnings………………………………………………………………………………………………………….. 74,000

On February 1 of the following year, a 10 percent stock dividend issued. The market value of the stock on February 1 was $19 per share.

Required:

Prepare the journal entry to record

a. The small 10 percent stock dividend and, alternatively,

b. The large 100 percent stock dividend.

Transaction list

1. Record the issue of a 10 percent stock dividend on the 24,000 shares of stock outstanding with a market value of $19 per share

2. Record the issue of a 100 percent stock dividend on the 24,000 shares of stock outstanding with a par value of $10 per share

Answer rating: 100% (QA)

a RECORD JOURNAL ENTRY DATE ACCOUNTS EXPLANATION DEBIT CREDIT AT ... View the full answer