Question - Recording Cash and Stock Dividends
Kirk Corporation had the following amounts in equity before issuing its annual dividend:
Common Stock (35,000 share outstanding) $105,000
Additional paid-in capital 285,000
Retained earnings 440,000
Kirk has decided to issue a 5% stock dividend simultaneously with a $1 per share cash dividend. The date of declaration is November 12, and the payment date is November 29.
Required: Prepare all journal entries necessary to record the declaration and payment of dividends. Assume that the stock was trading for $10 on the date of declaration and $12 on the date of payment. Also, assume the cash dividends were not paid on the additional shares of stock from the stock dividend. For a compound transaction, if an amount box does not require an entry, leave it blank or enter "0".