Kinmi Financial Corporation (Nasdaq), announced that the Board of Directors has approved a two-for-one stock split, to be effected in the form of a 100 percent common stock dividend. Kinmi Financial Corporation stockholders of record at the close of business on January 31 will recelve one additional share of common stock for every share of common stock then held. Distribution of additional shares issued as a result of the split is expected to occur on or about February 15.

At the time of the stock split, 31.5 million shares of common stock, $.001 par per share, were outstanding.

Required: 1. Prepare the journal entry, if any, that Kinmi recorded at the time of the stock split.

Question

Business

Nancy Underwood

11 October, 13:48

Kinmi Financial Corporation (Nasdaq), announced that the Board of Directors has approved a two-for-one stock split, to be effected in the form of a 100 percent common stock dividend. Kinmi Financial Corporation stockholders of record at the close of business on January 31 will recelve one additional share of common stock for every share of common stock then held. Distribution of additional shares issued as a result of the split is expected to occur on or about February 15.

At the time of the stock split, 31.5 million shares of common stock, $.001 par per share, were outstanding.

Required: 1. Prepare the journal entry, if any, that Kinmi recorded at the time of the stock split.

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Answers (1)

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Tess French · Answer 1

A. Journal entry recorded at the time of stoc

Dr Paid in capital in excess of par $31,500

Cr Comlon stock $31,500

B. Approximate value after split.

Approximate value of per share is $21.5

Explanation:

Kinmi Financial Corporation

A.

$31.5 million shares * 0.001

= 31,500,000 * 0.001

=$31,500

B.

Stock split will be equal have of the price.

Split ratio 2:1 = 2/1

Approximate value after split = Market price before split/split ratio

=43*1/2 = $21.5