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$20 par value, 150,000 shares authorized, 56,000 shares issued and outstanding	$	1,120,000
Paid-in capital in excess of par value, common stock		525,000
Retained earnings		675,000
Total stockholders equity	$	2,320,000

On February 5, the directors declare a 12% stock dividend distributable on February 28 to the February 15 stockholders of record. The stocks market value is $39 per share on February 5 before the stock dividend. The stocks market value is $35 per share on February 28.

Exercise 11-6 Part 1

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

Journal entry worksheet

Record the declaration of 12% stock dividend.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
Feb 05	Retained earnings	262,080
	Common dividend payable
	Paid-in capital in excess of par value, Common stock

Record the distribution of 12% stock dividend.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
Feb 28