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frozen [14]
3 years ago
8

Mustang Corporation had 100,000 shares of $2 par value common stock outstanding. On December 31, 2018, the company's board of di

rectors declares a 20 percent stock dividend. This stock dividend will be distributed on January 20, 2019 to the stockholders of record on January 15, 2019. The market price of the company's stock is $10 per share on December 31, 2018.
Required:
Write down the necessary journal entry to record the declaration of the stock dividend.
Business
1 answer:
Gnom [1K]3 years ago
6 0

Answer:

<u>December 31, 2018</u>

Debit : Dividend $40,000

Credit : Shareholders for dividends $40,000

Explanation:

When dividends are declared, we Debit an Equity Element - Dividend and Credit the Liability - Shareholders for dividends.

Calculation of this dividend is made on the stockholders in existence at the on a stated date (January 15 in this case) and at par value ($2) as follows :

Dividend = 100,000 x $2.00 x $0.20 = $40,000

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Answer:

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a. Computing the effective interest rate per payment period for the payment schedule which is monthly:

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Putting the values above:

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b. Computing the effective interest rate per payment period for the payment schedule which is quarterly:

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where

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Effective rate (semi- annually) = Nominal rate (r) / Compounded quarterly (m)

where

r is 9%

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Effective rate (annually) = Nominal rate (r) / Compounded yearly (m)

where

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Answer:

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In making ethical decisions, the organization should eliminate unethical options so as to select the best ethical alternatives.

<h3>Answer Options:</h3>

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