Reference no: EM132622768

Question 1: What is meant by the "market rate of interest", the "effective rate" of interest, and the "rate of return" of interest?

Question 2: On September 15, 2019, the Scottie Company Board of Directors declared a 10% dividend on common shares. The shares will be distributed on October 10, 2019, to shareholders. The market price of the stock on the day of the declaration was $ 42 while the market price on the date of distribution was $ 62. The shares have a par value of $ 5 per share and there were 1,000,000 shares outstanding before declaring dividends on shares.

Required:

Prepare the necessary journal entries to record the dividend on the following dates: (Remember to show your computations)

1. Declaration date

2, Registration date

3. Date of distribution