Chapter 6
Corporations: Contributed Capital and Dividends
271
b) Write the journal entry to record the declaration and subsequent payout of the dividends.
Mistry uses the cash dividends method to record dividends.
Date
Account Title and Explanation
Debit
Credit
AP-9A (
6
)
Bishop Lutz Hockey Paraphernalia Ltd. has 50,000 common shares issued. On January 1,
2016 the organization declared a 25% stock dividend. Prepare the journal entry to record
the declaration and distribution (on February 1, 2016) of the dividend. The market price on
the date of declaration was $15 per share. The company uses the stock dividends method to
account for stock dividends.
Date
Account Title and Explanation
Debit
Credit
