Question

On september 1, ziegler corporation had 52,000 shares of $5 par value common stock, and $156,000 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

No entry is made

Only memorandum is recorded that as a result of stock split number of shares outstanding is increased from 50,000 shares to 100,000 shares [50000*2/1] and the par value of shares is decrease to $ 2.5 [5*1/2 ] per share

This is because stock split does not affect the balance of any account.