Stock Dividend The stockholders’ equity of the Sadler Company is as shown:
|
Common stock, $10 par |
$250,000 |
|
Additional paid in capital on common stock |
150,000 |
|
Retained earnings |
200,000 |
|
$600,000 |
The company is considering the declaration and issuance of a stock dividend at a time when the market price is $30 per share.
Required
1. Assuming the board of directors recommends a 6% stock dividend, prepare:
a. the journal entry at the date of declaration
b. the journal entry at the date of issuance
c. the stockholders’ equity after the issuance
2. Assuming, instead, that a 40% stock dividend is recommended, repeat (a), (b), and (c) of Requirement 1.