The company had 10,000 shares of $1 par common stock outstanding. When each share of stock had

Question:

The company had 10,000 shares of $1 par common stock outstanding. When each share of stock had a market value of $130, the company decided to reduce the price per share of stock to $65 by doubling the number of shares outstanding. Make the journal entries necessary to record the declaration of the decision to double the number of shares and to distribute the shares assuming that

(1) The distribution is accounted for as a large stock dividend and

(2) The distribution is accounted for as a stock split.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...