On January 1, 2020, Lanie Limited had 1,000,000 ordinary shares outstanding that were issued at par. It

Question:

On January 1, 2020, Lanie Limited had £1,000,000 ordinary shares outstanding that were issued at par. It also had retained earnings of £750,000. The company issued 40,000 ordinary shares at par on July 1 and earned net income of £400,000 for the year.

Instructions
Journalize the declaration of a 15% share dividend on December 10, 2020, for the following independent assumptions.
a. Par value is £10, and market price is £18.
b. Par value is £5, and market price is £20.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...

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