Question

Bryce, Inc. declared a 50% stock dividend on March 15, when there were 1,000 shares of $1 par value stock issued and outstanding, and the market value was $5. The entry to record the declaration will include (debit/credit)_______ to the Retained Earnings account, in the amount of _______.

Answer 1

The appropriate entry  to record the declaration will include debit to the Retained Earnings account, in the amount of $500.

Retained earning

Based on the information given the appropriate entry to record this transaction is:

Journal entry

Debit Retained Earnings $500

(50% of 1,000 shares × $1 each)

Credit Common stock $500

(To record declaration of dividend)

Therefore the entry  to record the declaration will include debit to the Retained Earnings account, in the amount of $500.

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