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Zurich Corporation has 38,000 shares of $90 par common stock outstanding. On February 8, Zurich Corporation declared a 4% stock dividend to be issued April 11 to stockholders of record on March 10. The market price of the stock was $117 per share on February 8. Journalize the entries required on February 8, March 10, and April 11.

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Answer and Explanation:

The journal entries are shown below:

1. Stock dividend (38,000 × 117 × 4 % ) $177,840      

     To  stock dividend distributable (38,000 × 90 × 4 %) $136,800                

      To paid in capital in excess of par common stock ($177,840 - $136,800)  $41,040    

(being the stock dividend is recorded)

2. No journal entry is required as no transaction is take place

3. stock dividend distributable $136,800      

       To common stock   $136,800

(being the stock dividend is recorded)

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