Question

On January 1, 2016, Alpha Corporation had 300,000 shares of common stock outstanding with a par value of $3 per share. On March 31, Alpha Corporation declared a 10% stock dividend when the market value was $8 per share. Use this information to prepare the General Journal entry (without explanation) for March 31. If no entry is required then write "No Entry Required."

Answer 1

Step-by-step explanation:

The journal entry is shown below:

Retained earning A/c Dr $240,000

To Common Stock A/c $90,000

To Paid-in Capital in excess of Par-Common stock $150,000

(Being the dividend is recorded)

The computation is shown below

For common stock

= 300,000 shares × $3 × 10%

= $90,000

For retained earning

= 300,000 shares × $8 × 10%

= $240,000

And, the remaining balance is credited to the paid-in capital