Question

Selected Dividend Transactions, Stock Split

Selected transactions completed by Canyon Ferry Boating Corporation during the current fiscal year are as follows:

Journalize the transactions.

If no entry is required, type "No Entry Required" and leave the amount boxes blank. For a compound transaction, if an amount box does not require an entry, leave it blank.

Jan. 8. Split the common stock 2 for 1 and reduced the par from $56 to $28 per share. After the split, there were 120,000 common shares outstanding.

Apr. 30. Declared semiannual dividends of $1 on 8,000 shares of preferred stock and $0.09 on the common stock payable on July 1.

July 1. Paid the cash dividends.

Oct. 31. Declared semiannual dividends of $1 on the preferred stock and $0.06 on the common stock (before the stock dividend). In addition, a 1% common stock dividend was declared on the common stock outstanding. The fair market value of the common stock is estimated at $50.

Dec. 31. Paid the cash dividends and issued the certificates for the common stock dividend.

Answer 1

Answer Journal Entry Date Jan. 8 Debit Credit General Journal No Entry Required Apr. 30 $18,800 Cash Dividend [(8,000 x $1)+(120,000 x $0.09)] Cash Dividend Payable (To record the Dividend Payable) $18,800 July. 1 $18,800 Cash Dividend Payable Cash (To record the dividend payment) $18,800 Oct. 1 $15,200 Cash Dividend [(8,000 x $1) + (120,000 x $0.06)] Cash Dividend Payable (To record the Dividend Payable) $15,200 $60,000 Stock Dividends (120,000 x 1% x $50) Stock Dividends Distributable [(120,000 x 1%) $28] Paid in Capital in Excess of Par - Common Stock [120,000 x 1% x ($50 - $28)] (To record the Stock Dividends Distributable) $33,600 $26,400 Dec. 31 Cash Dividend Payable $15,200 Cash $15,200 (To record the dividend payment) $33,600 Stock Dividend Distributable Common Stock (To record the Stock Dividends Distributable) $33,600