The shareholders equity section of Lakeview Homes Corporations balance sheet at December 31, 2016 is reproduced below:

Question:

The shareholders’ equity section of Lakeview Homes Corporation’s balance sheet at December 31, 2016 is reproduced below:

Shareholders’ Equity

Common shares

Authorized 10,000 shares

Issued 5,000 shares $ 20,000

Retained earnings 100,000

Total shareholders’ equity $120,000

On January 15, 2016, Lakeview Homes declared a 10 per cent share dividend to holders of common shares. At this date, the common shares of the corporation were trading on the stock exchange at $10 each. The share dividend was issued February 15, 2016

Required: Prepare the journal entries to record the share dividend.

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
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... 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...