Jonee, Inc., reported the following amounts on its June 30, 2X09 balance sheet:
Preferred stock, $5 par, 10%, 5,000 shares issued and outstanding $ 25,000
Common stock, $1 par, 20,000 shares issued and outstanding 20,000
Additional paid-in capital, common stock 65,000
Total contributed capital $110,000
Retained earnings 20,000
Total stockholders' equity $130,000
Jonee, Inc. declared a 25% common stock dividend July 12, when the market value of the stock was $25 and a 30% preferred stock dividend July 13, when the market value of the stock was $50. Both stock dividends will be distributed on August 31, 2X09.
1. Journalize the declaration of the 25% common stock dividend and the 30% preferred stock dividend.
2. Journalize the distribution of the 25% common stock dividend and the 30% preferred stock dividend.
3. Prepare the stockholders' equity section of Jonee Inc.'s balance sheet after the effects of the two stock dividends.