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Unformatted text preview: Journal entry to declare stock dividend Outstanding shares (100,000 X 2% stock dividends will be given out) = 2,000 X $10 market p = $20,000 Outstanding shares X % = # of stock dividends # of stock dividends X market p =stock dividends DEBIT retained earnings 20,000 CREDIT common stock dividend distributable 2,000 # of shares X Par value 2,000 X $1 par = 2,000 CREDIT PIC in excess of par 18,000 (20,000 2,000) Journal entry to pay stock dividend DEBIT common stock dividend distributable 2,000 CREDIT Common Stock 2,000 Net effect: equity is unchanged - we redistributed balances in equity accounts Issued 2,000 more shares Increased contributed capital in excess by 18,000 Retained earnings has decreased by 20,000...
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This note was uploaded on 02/09/2012 for the course ACCT 1310 taught by Professor Staff during the Fall '10 term at Texas State.
- Fall '10