Question - The stockholders' equity accounts of Lawrence Company have the following balances on December 31, 2010.
Common stock, $10 par, 227,000 shares issued and outstanding $2,270,000
Paid-in capital in excess of par 1,200,000
Retained earnings 5,600,000
Shares of Lawrence Company stock are currently selling on the Midwest Stock Exchange at $40.
Prepare the appropriate journal entries for each of the following. (a) and (b) and provide answer for (c). (List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2.)
(a) A stock dividend of 5% is declared and issued.
(b) A stock dividend of 100% is declared and issued.
(c) How much of a reduction in retained earnings results when a 2-for-1 stock split is declared and issued?