Shareholders Equity

1. Preferred shares cash dividends have been declared and paid. Common share cash dividends have been declared, but not paid. HEMIs board of directors declared a 10% common stock dividend on November 1, 2019. Common shares for the stock dividends were issued to the existing common shareholders on December 30, 2019. However, the transaction has not been recorded in HEMIs accounting records. HEMI is authorized to issue 50,000,000 common shares. HEMI issued 12,000,000 common shares on January 2, 2019 (i.e., these were the shares outstanding prior to the stock dividend). HEMIs common shares are valued at $21 per share. The Accountant wants you to calculate the dollar amount to be assigned to the common shares issued as stock dividends and provide an adjusting journal entry to record the stock dividend.