Entries forStock Dividends

Senior Life Co. is an HMO for businesses in the Portland area. The following account balances appear on the balance sheet of Senior Life Co.:Common stock(400,000 shares authorized; 7,000 shares issued), $125par, $875,000;Paid-In Capitalin excess of par common stock, $91,000; andRetained earnings, $8,750,000. The board of directors declared a 1% stock dividend when the market price of thestockwas $153 a share. Senior Life Co. reported no income or loss for the current year.

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a1.Journalize the entry to record the declaration of thedividend, capitalizing an amount equal to market value.

a2.Journalize the entry to record the issuance of the stock certificates.

b.Determine the following amountsbeforethe stock dividend was declared:

(1) total paid-in capital, (2) total retained earnings, and(3)

totalstockholders' equity.

Total paid-in capital

Total retained earnings

Total stockholders' equity

c.Determine the following amountsafterthe stock dividend was declared and closing entries were recorded at the end of the year: (1) total paid-in capital, (2) total retained earnings, and (3) total stockholders' equity.

Total paid-in capital

Total retained earnings

Total stockholders' equity