Entries for stock dividends

Healthy Life Co$.$ is an HMO for businesses in the Fresno area. The following account balances appear on Healthy Life$$s balance sheet: Common stock $(400,000$ shares authorized ; $6,000$ shares issued$),$ $$100$ par, $$600,000$; Paid$-$In Capital in excess of par$$common stock, $$60,000$; and Retained earnings, $$6,600,000.$ The board of directors declared a $1\%$ stock dividend when the market price of the stock was $$134$ a share. Healthy Life reported no income or loss for the current year.

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a$1.$ Journalize the entry to record the declaration of the dividend, capitalizing an amount equal to market value.

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Stock Dividends

Stock Dividends Distributable

Paid$-$In Capital in Excess of Par$-$Common Stock

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a$2.$ Journalize the entry to record the issuance of the stock certificates.

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Stock Dividends Distributable

Common Stock

b$.$ Determine the following amounts before the stock dividend was declared: $(1)$ total paid$-$in capital, $(2)$ total retained earnings, and $(3)$ total stockholders' equity.

Total paid$-$in capital

Total retained earnings

Total stockholders' equity

Total paid$-$in capital

Total retained earnings

Total stockholders' equity

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