Question

Alpine Energy Corporation has 1,500,000 shares of $40 par common stock outstanding. On August 2, Alpine Energy declared a 4% stock dividend to be issued October 8 to stockholders of record on September 15. The market price of the stock was $70 per share on August 2.Journalize the entries required on August 2, September 15, and October 8.If no entry is required, select "No entry required" and leave the amount boxes blank. For a compound transaction, if an amount box does not require an entry, leave it blank.

Answer 1

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)