Part 1: On September 15, 2024, the Erid Mithrin Company board of directors declared a 10% stock dividend on common shares. The shares are to be distributed on October 10, 2024, to shareholders of record on October 1, 2024. The market price per share on the date of declaration was $23.6 while the market price on the date of distribution was $25.6. The common stock has a par of $5 per share and there were 1,700,000 shares outstanding prior to the declaration of the stock dividend.
Part 2: If instead, the board of directors declared a 2-for-1 stock split on the common shares. The company accounts for the stock split effected in the form of a stock dividend.
Part 3: If instead, the board of directors announces a 5% stock dividend on the common shares. Cash payments are given in lieu of 10,000 fractional shares.
Required:Prepare any necessary journal entries to record the above transactions.