Question

On January 1, 2019, Frederick Corporation had 200,000 shares of common stock outstanding with a par value of $5 per share. On March 31, Frederick Corporation authorized a 10% stock dividend when the market value was $18 per share.

Required:
1. 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

Dividend (debit) $100,000

Shareholders for Dividends (credit) $100,000

Step-by-step explanation:

Recognize a Statement of Changes in Equity Item - Dividend and also Recognize the Liability - Shareholders for Dividends that arises as a result of the authorization.

Journal

Dividend (debit) $100,000

Shareholders for Dividends (credit) $100,000

Dividend Calculation :

Dividend Distribution = 200,000 shares × $5 per share × 10%

= $100,000