Journal entry to record liquidating dividend

When a company such as Big City Dwellers issues 5,000 shares of its

When a company such as Big City Dwellers issues 5,000 shares of its $1 par value common stock at par for cash, that means the company will receive $5,000 (5,000 shares × $1 per share).The sale of the stock is recorded by increasing (debiting) cash and increasing (crediting) common stock by $5,000.If the treasury stock is sold above its cost, the sale increases (debits) cash for the proceeds received, decreases (credits) treasury stock for the cost paid when the treasury stock was repurchased, and increases (credits) additional paid‐in‐capital—treasury stock for the difference between the selling price and the repurchase price.If Soccer Trio Corporation subsequently sells 7,500 of the shares repurchased for $25 for $28, the entry to record the sale would be as shown: When the remaining 7,500 shares are sold, the entry to record the sale includes an increase (debit) to cash for the proceeds received, a decrease (credit) to treasury stock for the repurchase price of $25 per share or $187,500, and a decrease (debit) to additional paid‐in‐capital × treasury stock, if the account has a balance, for the difference.Shares of treasury stock do not have the right to vote, receive dividends, or receive a liquidation value.Companies purchase treasury stock if shares are needed for employee compensation plans or to acquire another company, and to reduce the number of outstanding shares because the stock is considered a good buy.

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When a company such as Big City Dwellers issues 5,000 shares of its $1 par value common stock at par for cash, that means the company will receive $5,000 (5,000 shares × $1 per share).

The sale of the stock is recorded by increasing (debiting) cash and increasing (crediting) common stock by $5,000.

par value common stock at par for cash, that means the company will receive ,000 (5,000 shares ×

When a company such as Big City Dwellers issues 5,000 shares of its $1 par value common stock at par for cash, that means the company will receive $5,000 (5,000 shares × $1 per share).The sale of the stock is recorded by increasing (debiting) cash and increasing (crediting) common stock by $5,000.If the treasury stock is sold above its cost, the sale increases (debits) cash for the proceeds received, decreases (credits) treasury stock for the cost paid when the treasury stock was repurchased, and increases (credits) additional paid‐in‐capital—treasury stock for the difference between the selling price and the repurchase price.If Soccer Trio Corporation subsequently sells 7,500 of the shares repurchased for $25 for $28, the entry to record the sale would be as shown: When the remaining 7,500 shares are sold, the entry to record the sale includes an increase (debit) to cash for the proceeds received, a decrease (credit) to treasury stock for the repurchase price of $25 per share or $187,500, and a decrease (debit) to additional paid‐in‐capital × treasury stock, if the account has a balance, for the difference.Shares of treasury stock do not have the right to vote, receive dividends, or receive a liquidation value.Companies purchase treasury stock if shares are needed for employee compensation plans or to acquire another company, and to reduce the number of outstanding shares because the stock is considered a good buy.

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When a company such as Big City Dwellers issues 5,000 shares of its $1 par value common stock at par for cash, that means the company will receive $5,000 (5,000 shares × $1 per share).

The sale of the stock is recorded by increasing (debiting) cash and increasing (crediting) common stock by $5,000.

per share).

The sale of the stock is recorded by increasing (debiting) cash and increasing (crediting) common stock by ,000.

If the stock's market value is not yet determined (as would occur when a company is just starting), the fair market value of the assets or services received is used to value the transaction.

Stockholders' equity is affected only if the corporation issues additional stock or buys back its own stock.

Treasury stock is the corporation's issued stock that has been bought back from the stockholders.

If the Big City Dwellers sold their

If the stock's market value is not yet determined (as would occur when a company is just starting), the fair market value of the assets or services received is used to value the transaction.

Stockholders' equity is affected only if the corporation issues additional stock or buys back its own stock.

Treasury stock is the corporation's issued stock that has been bought back from the stockholders.

If the Big City Dwellers sold their $1 par value stock for $5 per share, they would receive $25,000 (5,000 shares × $5 per share) and would record the difference between the $5,000 par value of the stock (5,000 shares × $1 par value per share) and the cash received as additional paid‐in‐capital in excess of par value (often called additional paid‐in‐capital).

When no‐par value stock is issued and the Board of Directors establishes a stated value for legal purposes, the stated value is treated like the par value when recording the stock transaction.

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If the stock's market value is not yet determined (as would occur when a company is just starting), the fair market value of the assets or services received is used to value the transaction.Stockholders' equity is affected only if the corporation issues additional stock or buys back its own stock.Treasury stock is the corporation's issued stock that has been bought back from the stockholders.If the Big City Dwellers sold their $1 par value stock for $5 per share, they would receive $25,000 (5,000 shares × $5 per share) and would record the difference between the $5,000 par value of the stock (5,000 shares × $1 par value per share) and the cash received as additional paid‐in‐capital in excess of par value (often called additional paid‐in‐capital).When no‐par value stock is issued and the Board of Directors establishes a stated value for legal purposes, the stated value is treated like the par value when recording the stock transaction.

par value stock for per share, they would receive ,000 (5,000 shares × per share) and would record the difference between the ,000 par value of the stock (5,000 shares ×

If the stock's market value is not yet determined (as would occur when a company is just starting), the fair market value of the assets or services received is used to value the transaction.

Stockholders' equity is affected only if the corporation issues additional stock or buys back its own stock.

Treasury stock is the corporation's issued stock that has been bought back from the stockholders.

If the Big City Dwellers sold their $1 par value stock for $5 per share, they would receive $25,000 (5,000 shares × $5 per share) and would record the difference between the $5,000 par value of the stock (5,000 shares × $1 par value per share) and the cash received as additional paid‐in‐capital in excess of par value (often called additional paid‐in‐capital).

When no‐par value stock is issued and the Board of Directors establishes a stated value for legal purposes, the stated value is treated like the par value when recording the stock transaction.

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If the stock's market value is not yet determined (as would occur when a company is just starting), the fair market value of the assets or services received is used to value the transaction.Stockholders' equity is affected only if the corporation issues additional stock or buys back its own stock.Treasury stock is the corporation's issued stock that has been bought back from the stockholders.If the Big City Dwellers sold their $1 par value stock for $5 per share, they would receive $25,000 (5,000 shares × $5 per share) and would record the difference between the $5,000 par value of the stock (5,000 shares × $1 par value per share) and the cash received as additional paid‐in‐capital in excess of par value (often called additional paid‐in‐capital).When no‐par value stock is issued and the Board of Directors establishes a stated value for legal purposes, the stated value is treated like the par value when recording the stock transaction.

par value per share) and the cash received as additional paid‐in‐capital in excess of par value (often called additional paid‐in‐capital).

When no‐par value stock is issued and the Board of Directors establishes a stated value for legal purposes, the stated value is treated like the par value when recording the stock transaction.

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