Problem
Ruby Red Corp. stockholder's equity section of the balance sheet looks like this on July 30:
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Stockholder's Equity:
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Common Stock, $4 par, 200,000 shares authorized,
75,000 shares issued and outstanding
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300,000
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Paid in Capital in excess of Par Value, Common Stock
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700,000
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Total Paid in Capital
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1,000,000
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Retained Earnings
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585,000
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Total Stockholder's Equity
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1,585,000
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a) Prepare the journal entry to record a 8% stock dividend declared and distributed on July 31 when the market rate was $15 per share.
b) Post the entries to the T-accounts provided.
c) Show how the stockholder's equity section of the balance sheet will look after this transaction.