Question

The following data were taken from the balance sheet accounts of Splish Corporation on December 31, 2016.

Current assets $515,000

Debt investments 640,000

Common stock (par value $10) 475,000

Paid-in capital in excess of par 145,000

Retained earnings 796,000

Prepare the required journal entries for the following unrelated items.

(a) A 4% stock dividend is (1) declared and (2) distributed at a time when the market price per share is $41.

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

(c) A dividend is declared January 5, 2017, and paid January 25, 2017, in bonds held as an investment. The bonds have a book value of $92,000 and a fair value of $131,000. ( To record change in value of bonds and to record declaration of dividends)

Answer 1