ABC Ltd. was incorporated February 1, 2024, and is authorized to issue an unlimited number of preferred and common shares. The company entered into the following transactions during the year:

Feb. 10 Issued 30,000 common shares for $23 per share.

Feb. 21 Issued 700 common shares to the companys lawyer as payment for a bill of $18,000 for services performed in helping the company to incorporate.

Mar. 16 Issued 1,000 convertible preferred shares for $95 per share.

Sept. 10 Issued 5,000 convertible preferred shares for $105 per share.

Oct 1 Declared a 3 for 1 stock split

Oct. 1 Converted 1,000 preferred shares into common shares. One preferred share is convertible into 4 common shares. The fair values of the common and preferred shares are $25 and $102 respectively.

Required

a). Prepare the journal entries to record the above transactions.

b). It is close to their year-end and ABC is considering to either declare a 2-for-1 stock dividend OR a Cash Dividend of $0.01 per share. Without all the financial information available, what are the factors that ABC should consider if they plan to:

- declare a stock dividend instead of a cash dividend

- declare a cash dividend instead of a stock dividend

- do not declare any dividend at all