Answer:
Langley Corporation
Journal Entries:
December 1:
Debit Retained Earnings $75,000
Credit Stock Dividend Payable $75,000
To record the declaration of 15% of 50,000 at par value.
December 31:
Debit Stock Dividend Payable $75,000
Credit Common Stock $75,000
To record the issuance of common stock for the stock dividend.
Explanation:
Data and Calculations:
Outstanding common stock = 50,000
Par value = $10
Market price = $16
December 1, Stock dividend declared = 7,500 (15% of 50,000) shares
December 31, Issuance of the stock dividend
New outstanding common stock shares = 57,500 (50,000 + 7,500)
