The following data were taken from the balance sheet accounts of Masefield Corporation on December 31, 2007.

Question:

Current assets ........ $540,000

Investments .......... 624,000

Common stock (par value $10) . 500,000

Paid-in capital in excess of par .. 150,000

Retained earnings ....... 840,000

Instructions

Prepare the required journal entries for the following unrelated items.

(a) A 5% stock dividend is declared and distributed at a time when the market value of the shares is $39 per share.

(b) The par value of the capital stock is reduced to $2 with a 5-for-1 stock split.

(c) A dividend is declared January 5, 2008, and paid January 25, 2008, in bonds held as an investment. The bonds have a book value of $100,000 and a fair market value of $135,000.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Corporation
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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... Par Value
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,...