(L03,4) (Equity Items on the Balance Sheet) The following are selected transactions that may affect stockholders’

equity.

1. Recorded accrued interest earned on a note receivable.

2. Declared a cash dividend.

3. Declared and distributed a stock split.

4. Approved a retained earnings restriction.

5. Recorded the expiration of insurance coverage that was previously recorded as prepaid insurance.

6. Paid the cash dividend declared in item 2 above.

7. Recorded accrued interest expense on a note payable.

8. Declared a stock dividend.

9. Distributed the stock dividend declared in item 8.

Instructions In the following table, indicate the effect each of the nine transactions has on the financial statement elements listed. Use the following code: I = Increase, D = Decrease, NE = No effect.

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Item Assets Liabilities Stockholders' Paid-in Equity Capital Retained Earnings Income Net