Accounting for cash and stock dividends (Learning Objectives 4 & 5)

10–15 min.

Cassel, Inc., is authorized to issue 700,000 shares of $2 par common stock. The company issued 80,000 shares at $9 per share, and all 80,000 shares are outstanding.

When the market price of common stock was $20 per share, Cassel, Inc., declared and distributed a 10% stock dividend. Later, Cassel, Inc., declared and paid a $0.25 per share cash dividend.

Requirements 1. Journalize the declaration and distribution of the stock dividend.

2. Journalize the declaration and the payment of the cash dividend.

AppendixLO1