On January 1, 2019, Frederick Corporation had 200,000 shares of common stock outstanding with a par value of $5 per share. On March 31, Frederick Corporation authorized a 10% stock dividend when the market value was $18 per share.

Required:

1. Use this information to prepare the General Journal entry (without explanation) for March 31. If no entry is required then write "No Entry Required."

Question

Lily Murillo

Business

7 February, 10:34

On January 1, 2019, Frederick Corporation had 200,000 shares of common stock outstanding with a par value of $5 per share. On March 31, Frederick Corporation authorized a 10% stock dividend when the market value was $18 per share.

Required:

1. Use this information to prepare the General Journal entry (without explanation) for March 31. If no entry is required then write "No Entry Required."

+2

Answers (1)

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Alexis · Answer 1

Dividend (debit) $100,000

Shareholders for Dividends (credit) $100,000

Explanation:

Recognize a Statement of Changes in Equity Item - Dividend and also Recognize the Liability - Shareholders for Dividends that arises as a result of the authorization.

Journal

Dividend (debit) $100,000

Shareholders for Dividends (credit) $100,000

Dividend Calculation:

Dividend Distribution = 200,000 shares * $5 per share * 10%

= $100,000