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Prepare the journal entries to record the stock dividend

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Reference no: EM132915068

On December 31, 2020, Talbot Corporation's common shares had a market price of $25 per share before any stock dividend or split, and the shareholders' equity section of the balance sheet appeared as follows:

Common shares: unlimited shares authorized, 59,000 shares issued and outstanding $1,094,400

Retained earnings 1,542,000

Total shareholders' equity $2,636,400

On December 31, 2020, the board of directors of Talbot Corporation declared a 20% stock dividend. On January 15, 2021, the new shares were issued.

Problem 1: Prepare the journal entries to record the stock dividend

  1. 2 bar for 2020
  2. 2 bar for 2021

Problem 2: Determine the balance in Retained Earnings after the stock dividend.

Reference no: EM132915068

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