On January 1, 2014, Chen Corporation had the following stockholders’ equity accounts.

Common Stock ($5 par value, 200,000 shares issued and

outstanding) ....................$1,000,000

Paid-in Capital in Excess of Par—Common Stock ...... 200,000

Retained Earnings ................. 840,000

During the year, the following transactions occurred.

Jan. 15 Declared a $1 cash dividend per share to stockholders of record on January 31, payable February 15.

Feb. 15 Paid the dividend declared in January.

Apr. 15 Declared a 10% stock dividend to stockholders of record on April 30, distributable May 15. On April 15, the market price of the stock was $15 per share.

May 15 Issued the shares for the stock dividend.

July 1 Announced a 2-for-1 stock split. The market price per share prior to the announcement was $17. (The new par value is $2.50.)

Dec. 1 Declared a $0.50 per share cash dividend to stockholders of record on December 15, payable January 10, 2015.

31 Determined that net income for the year was $250,000.

Instructions

(a) Journalize the transactions and the closing entries for net income and dividends.

(b) Enter the beginning balances, and post the entries to the stockholders’ equity accounts.

(c) Prepare a stockholders’ equity section at December 31.