Answer:
The Journal entries are as follows:
(a) On August 2,
Stock Dividends A/c (1,500,000 × $70 × 4%) Dr. 4,200,000
To Stock dividend distributable (1,500,000 × $40 × 4%) 2,400,000
To Paid in Capital in excess of par- Common stock 1,800,000
(To record the stock dividend)
(b) On September 15,
No entry required
(c) On October 8,
Stock Dividend distributable A/c Dr. $2,400,000
To Common stock $2,400,000
(To record the stock dividend issued to stockholders)
