It is not appropriate of you to assign your homework to others. To get help you should do the work as well as you can and provide your solution so someone can help you by pointing out where you are wrong and by explaining areas where you show weaknesses.
When a divided is declared a journal entry is made to show the reduction in retained earnings and the amount of dividend payable. The reduction in retained earnings is for the market value of the shares distributed as a stock dividend, and the dividend is paid only on stock that is issued and outstanding. Treasury shares do not receive dividends.
On the date of record the ownership of the shares is updated to make sure the correct owner receives the dividend. Dividends are not distributed on the date of record. They are distributed on the payment date which is three days later, but you have no choice but to do what a badly written problem tells you. The distribution is recorded by debiting the two Dividends Payable liabilities.
For the stock dividend you normally credit the par value of the shares issued and the rest goes into additional paid in capital, but you are not provided the par value so you have to assume it is no-par stock.
You have to make your own journal entries but to show you how kind-hearted I am, the credit to cash will be $21,250.
Need the journal entries please!
Declared a 2% stock dividend on common stock and a $1.25 quarterly cash dividend per share on preferred stock. On the date of declaration, the market value of the common stock was $40 per share. On the date of record, 85,000 shares of common stock had been issued, 6,500 shares of treasury common stock were held, and 17,000 shares of preferred stock had been issued.
