O’Grady Communications, Inc., began 2010 with 3.2 million shares of \($1\) par com¬ mon stock issued and outstanding. Beginning paid-in capital in excess of par was \($5.5\) million, and retained earnings was \($13.3\) million. In May 2010, O’Grady Communications, Inc., issued 160,000 shares of stock at \($17\) per share. In October, when the stock’s market price was \($18\) per share, the board of directors distributed a 20% stock dividend.

Requirements

1. Make the journal entries for the issuance of stock for cash and for the declaration and distribution of the 20% stock dividend.

2. Prepare the company’s statement of stockholders’ equity for the year ended December 31, 2010.