Required information

Exercise 11-6 Stock dividends and per share book values LO P2

[The following information applies to the questions displayed below.] The stockholders equity of TVX Company at the beginning of the day on February 5 follows:

Common stock$5 par value, 150,000 shares authorized, 51,000 shares issued and outstanding	$	255,000
Paid-in capital in excess of par value, common stock		525,000
Retained earnings		675,000
Total stockholders equity	$	1,455,000

On February 5, the directors declare a 16% stock dividend distributable on February 28 to the February 15 stockholders of record. The stocks market value is $35 per share on February 5 before the stock dividend. The stocks market value is $30 per share on February 28.

Exercise 11-6 Part 1

1. Prepare entries to record both the dividend declaration and its distribution.