Question -
Part A - York Corporation owns 8,000 shares of common stock in Laurence Company. York acquired the shares at a cost of $85,000, 18 months earlier. On March 1, 2017, York declared a property dividend payable in the form of the Laurence shares, at a time when the fair value of the shares is $91,000. The property dividend will be paid on April 1, 2017. On April 1, the fair value of the Laurence shares was $91,500.
Required: Prepare the necessary journal entries for the declaration and payment of the property dividend.
Part B - On March 1, Pickens Corporation declared and distributed a 10% stock dividend. On the date of declaration, the stock is trading for $30 per share. At that time, Pickens had 50,000 shares of $2 par common stock issued and outstanding.
Required: Prepare the journal entry to record the declaration and distribution of the stock dividend. (Yes, on the same day, for the sake of simplicity.)
Part C - On March 1, 2017, Checker Company declared and paid a 30% stock dividend. On the date of declaration, Checker had 500,000 shares of $5 par common stock issued and outstanding. The stock was trading at $20 per share on the date of declaration.
Required: Prepare the journal entry to record the declaration and distribution of the stock dividend (again, on the same day for simplicity).