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Prepare Journal Entries in good form for the following (unrelated) equity transactions: 1) Billbo Company issues 1,000...

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Accounting

Prepare Journal Entries in good form for the following(unrelated) equity transactions:

1) Billbo Company issues 1,000 $.01 par stock for $10 cash pershare on February 1st.

2) Conner's directors declare a 10% stock dividend on December31st. This stock dividend of 500 shares, computed as %10 of its5,000 outstanding shares, is to be distributed on January 20 tostockholders of record on January 15th. The market price of thestock on December 31st. is $15.

3) David Company's board of directors declares a $1 per sharecash dividend on the 1,000 outstanding shares on January 9th.

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Solution:

Journal Entries
Event Date Particulars Debit Credit
1 1-Feb Cash Dr $10,000.00
      To Common stock $10.00
      To Paid in capital in excess of par - common stock $9,990.00
(To record issue of common shares)
2 31-Dec Stock dividends Dr $7,500.00
      To Common stock dividend distributable $7,500.00
(To record declaration of stock dividend)
3 20-Jan Common stock dividend distributable Dr $7,500.00
      To Common stock $5.00
      To Paid in capital in excess of par - common stock $7,495.00
(To record distribution of stock dividend)
4 9-Jan Dividends Dr $1,000.00
      To Dividend payable $1,000.00
(To record declaration of cash dividend)

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Prepare Journal Entries in good form for the following(unrelated) equity transactions:1) Billbo Company issues 1,000 $.01 par stock for $10 cash pershare on February 1st.2) Conner's directors declare a 10% stock dividend on December31st. This stock dividend of 500 shares, computed as %10 of its5,000 outstanding shares, is to be distributed on January 20 tostockholders of record on January 15th. The market price of thestock on December 31st. is $15.3) David Company's board of directors declares a $1 per sharecash dividend on the 1,000 outstanding shares on January 9th.

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