Healthy Life Co$.$ is an HMO for businesses in the Fresno area. The following account balances appear on Healthy Life$$s balance sheet: Common stock $(3,000,000$ shares authorized; $2,200,000$ shares issued$),$ $$15$ par, $$33,000,000$; Paid$-$in capital in excess of par$$common stock, $$9,000,000$; and Retained earnings, $$89,550,000.$ The board of directors declared a $5\%$ stock dividend when the market price of the stock was $$18$ a share. Healthy Life reported no income or loss for the current year.

If no entry is required, select $"$No entry required" and leave the amount boxes blank. If an amount box does not require an entry, leave it blank.

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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

$1,980,000$

Stock Dividends Distributable

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

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a$1.$ Recall that a stock dividend affects only stockholders' equity.

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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

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a$2.$ Recall that a stock dividend affects only stockholders' equity.

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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.

Line Item Description Amount

Total paid$-$in capital fill in the blank $1$ of $6$$

$42,000,000$

Total retained earnings fill in the blank $2$ of $6$$

$89,550,000$

Total stockholders' equity fill in the blank $3$ of $6$$

$131,550,000$

c$.$ Determine the following amounts after the 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.

Line Item Description Amount

Total paid$-$in capital fill in the blank $4$ of $6$$

Total retained earnings fill in the blank $5$ of $6$$

Total stockholders' equity fill in the blank $6$ of $6$$

$131,550,000$

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