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15 August, 02:23

On February 5, the directors declare a 2% stock dividend distributable on February 28 to the February 15 stockholders of record. The stock's market value is $31 per share on February 5 before the stock dividend. 1. Prepare entries to record both the dividend declaration and its distribution.

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  1. 15 August, 05:01
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    Feb 5

    Dr Stock dividend 35,340

    Cr Common Stock dividend distributable 22,800

    Cr Paid in capital in excess of par value-Common Stock 12,540

    Feb 28

    Dr Common Stock dividend distributable 22,800

    Cr Common Stock 22,800

    Explanation:

    TVX Company Journal entry

    Feb 5

    Dr Stock dividend

    (57000*2%*31)

    Cr Common Stock dividend distributable 22,800

    Cr Paid in capital in excess par value of Common Stock 12,540

    (35,340-22,800)

    Feb 28

    Dr Common Stock dividend distributable 22,800

    Cr Common Stock 22,800

    Feb. 5

    Shares to be issued: 57,000 shares * 2%

    = 1,140

    Common Stock Dividend Distributable

    1,140shares * $20 per share

    =22,800
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