On January 1, 2017, McDonald Corporation had $2,000,000 of $10 par value common stock outstanding that was issued at par and retained earnings of $1,000,000. The company issued 200,000 shares of common stock at $12 per share on July 1. On December 15, the board of directors declared a 15% stock dividend to stockholders of record on December 31, 2017, payable on January 15, 2018. The market value of McDonaldCorporation stock was $15 per share on December 15 and $16 per share on December 31. Net income for 2017 was $500,000.

Instructions

(1)Journalize the issuance of stock on July 1 and the declaration of the stock dividend on December 15.