E15-14_G.K.Chesterton Company_Entries for Stock Dividends and Stock Splits

E15-14

(Entries for Stock Dividends and Stock Splits)

The stockholders’ equity accounts of G.K.Chesterton Company have the following balances on December 31, 2007.

Common stock, $10 par, 300,000 shares issued and outstanding                  $3,000,000

Paid-in capital in excess of par                                                                                   1,200,000

Retained earnings                                                                                           5,600,000

Shares of G.K. Chesterton Company stock are currently selling on the Midwest Stock Exchange at $37.

Instructions

Prepare the appropriate journal entries for each of the following cases.

(a)   Astock dividend of 5% is declared and issued.

(b)   Astock dividend of 100% is declared and issued.

(c)    A2-for-1 stock split is declared and issued.