Requirements 1. 2. Suppose NBTel had originally issued 300 million shares of common stock, $25 par,...

 

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Requirements 1. 2. Suppose NBTel had originally issued 300 million shares of common stock, $25 par, for $75 cash per share many years ago. Prepare the journal entry. Suppose NBTel had retained earnings of $9 billion by December 31, 20X2. The board of directors declared a two-for-one stock split and immediately exchanged two $12.50 par shares for each share outstanding. Prepare the journal entry, if any. Present the stockholders' equity section of the balance sheet before and after the split. 3. Repeat requirement 2, but assume that one additional $25 par share was issued by NBTel for each share outstanding (instead of exchanging shares) and accounted for as a two-for-one stock split "effected in the form of a stock dividend." 4. What journal entries would be made by the investor who bought 840 shares of NBTel common stock and held this investment throughout the time covered in requirements 1, 2, and 3? Requirements 1. 2. Suppose NBTel had originally issued 300 million shares of common stock, $25 par, for $75 cash per share many years ago. Prepare the journal entry. Suppose NBTel had retained earnings of $9 billion by December 31, 20X2. The board of directors declared a two-for-one stock split and immediately exchanged two $12.50 par shares for each share outstanding. Prepare the journal entry, if any. Present the stockholders' equity section of the balance sheet before and after the split. 3. Repeat requirement 2, but assume that one additional $25 par share was issued by NBTel for each share outstanding (instead of exchanging shares) and accounted for as a two-for-one stock split "effected in the form of a stock dividend." 4. What journal entries would be made by the investor who bought 840 shares of NBTel common stock and held this investment throughout the time covered in requirements 1, 2, and 3?

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Solution Situation 1 The journal entry for issuance of 300 million shares wil... View the full answer