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Dividend Entries for Masefield Corporation

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(Dividend Entries) The following data were taken from the balance sheet accounts of Masefield Corporation on December 31, 2007.

Current Assets $540,000
Investments $624,000
Common Stock (par value $10) $500,000
Paid in Capital in excess of par $150,000
Retained Earnings $840,000

Instructions

Prepare the required journal entries for the following unrelated items.
a.) A 5% stock dividend is declared and distributed at a time when the market value of the shares is $39 per share.
b.) The par value of the capital stock is reduced to $2 with a 5-for-1 stock split.
c.) A dividend is declared January 5, 2008, and paid January 25, 2008 in bonds held as an investment. The bonds have a book value of $100,000 and a fair market value of $135,000.

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Solution Summary

(Dividend Entries) The following data were taken from the balance sheet accounts of Masefield Corporation on December 31, 2007.

Current Assets $540,000
Investments $624,000
Common Stock (par value $10) $500,000
Paid in Capital in excess of par $150,000
Retained Earnings $840,000

Instructions

Prepare the required journal entries for the following unrelated items.
a.) A 5% stock dividend is declared and distributed at a time when the market value of the shares is $39 per share.
b.) The par value of the capital stock is reduced to $2 with a 5-for-1 stock split.
c.) A dividend is declared January 5, 2008, and paid January 25, 2008 in bonds held as an investment. The bonds have a book value of $100,000 and a fair market value of $135,000.

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