Question

On september 1, ziegler corporation had 74,000 shares of $5 par value common stock, and $222,000 of retained earnings. on that date, when the market price of the stock is $15 per share, the corporation issues a 2-for-1 stock split. the general journal entry to record this transaction is:

Answer 1

Given:
74,000 shares of $5 par value common stock
$222,000 of retained earnings
corporation issues a 2-for-1 stock split.

The general journal entry to record this transaction is: NONE. No journal entry is made for this transaction. Only a memo entry will be jotted down to record the 2-for-1 stock split.

No entry is made because the total dollar value does not change.

A memorandum entry is defined as short message entered into the general journal and also entered into a general ledger account. It does not have a debit or credit amount.