Recording Stock Dividends and Stock Splits

The records of Dixie Corporation showed the following balances on November 1, 2020.

Common stock, $10 par, 12,000 shares outstanding	$120,000
Paid-in capital in excess of par	40,800
Retained earnings	80,000

The fair value of its stock is $18 per share.

Accounting for Stock Dividends

Accounting for Stock Splits

Prepare journal entries for the following three separate scenarios.

a. The company declares (November 1, 2020) and issues (November 20, 2020) a 10% stock dividend.

b. The company declares (November 1, 2020) and issues (November 20, 2020) a 10% stock dividend. Of the 1,200 stock dividend shares, 1,120 shares are whole shares and 80 shares are fractional shares. It is the companys policy to pay out fractional shares in cash.

c. The company declares (November 1, 2020) and issues (November 20, 2020) a stock split effected in the form of a 100% stock dividend.

Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in alphabetical order.

Note: If a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero).