Liquidating dividend accounting Sexy chat uk free

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On its books, these shares were recorded at their cost of ,000. If the fair market value had been less than the book value, a loss, rather than a gain, would have been recognized.If a corporation wishes to pay a cash dividend but has no cash at the moment, it may issue a special type of note payable to the stockholders promising to pay later. If the scrip pays interest, the interest portion of the payment should be debited to Interest Expense and not be treated as part of the dividend.The following entry is required: Cash Paid = Shares of Common Stock x Dividend = 800,000 x .00, or

On its books, these shares were recorded at their cost of $10,000. If the fair market value had been less than the book value, a loss, rather than a gain, would have been recognized.If a corporation wishes to pay a cash dividend but has no cash at the moment, it may issue a special type of note payable to the stockholders promising to pay later. If the scrip pays interest, the interest portion of the payment should be debited to Interest Expense and not be treated as part of the dividend.The following entry is required: Cash Paid = Shares of Common Stock x Dividend = 800,000 x $2.00, or $1,600,000 The journal entry to record the transaction would be: In the above example, shareholders would need to be informed that $400,000 / 800,000, or $0.50 per share were regular dividends, while $1.50 per share represents a liquidating dividend.Decrease in retained earnings follows the distribution of dividends. Let’s assume that the Lie Dharma Corporation, on March 15, 2009, declared a cash dividend of $1 per share on 2,000,000 shares payable June 1, 2009, to all stockholders of record April 15. At the date of distribution, the firm debits the note payable or scrip payable, and the related interest expense and credit cash. Notes Payable to Stockholders [Scrip Dividends Payable] = 3,000,000 [$1 x 3,000,000] 2. No corporate assets are distributed; the value of the total stockholder’s equity remains unchanged as well as each stockholder’s percentage ownership in the firm. Common Stock, $20 par = 120,000 Following the issuance the stockholder’s equity is as follows: Common Stock, $20 par [36,000 shares issued and outstanding] = $ 720,000 Additional Paid-in-Capital = 330,000 Total Stockholders’ Equity = $1,500,000 Let’s now assume that the firm issued instead a 50% stock dividend.The types of dividends include [1] cash, [2] property, [3] scrip, [4] liquidating, and [5] stock. Let’s assume that the Hugo Company declared, on June 17, 2009, a scrip dividend in the form of a three-month promissory note amount to $1 a share on 3,000,000 shares outstanding. At the date of payment, September 17, 2009 [Debit]. Interest Expense = 75,000 [$3,000,000 x 0.10 x 3/12] [Credit]. To illustrate the accounting for small stock dividend, let’s assume a corporation that has the following stockholder’s equity prior to the issuance of a small stock dividend: Common Stock, $20 par [30,000 shares issued and outstanding] = $ 600,000 Additional Paid-in-Capital = 300,000 Total Stockholder’s Equity = $1,500,000 Let’s also assume that the firm issued a 20% stock dividend on a date where the stock was selling at $25 per share. The following journal entries are required at the time of declaration: [Debit].With the exception of stock dividends, all the other dividends reduce the stockholder’s equity in the corporation. Cash = 3,075,000 Dividends paid based on other than retained earnings are called “liquidating dividends”, as a return of contributed capital rather than a distribution of retained earnings. Retained Earnings 50% [30,000 share x $20] = 300,000 [Credit].Creditors are always senior to shareholders in receiving the corporation's assets upon winding up.However, in case all debts to creditors have been fully satisfied, there is a surplus left to divide among equity-holders.

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On its books, these shares were recorded at their cost of $10,000. If the fair market value had been less than the book value, a loss, rather than a gain, would have been recognized.

If a corporation wishes to pay a cash dividend but has no cash at the moment, it may issue a special type of note payable to the stockholders promising to pay later. If the scrip pays interest, the interest portion of the payment should be debited to Interest Expense and not be treated as part of the dividend.

The following entry is required: Cash Paid = Shares of Common Stock x Dividend = 800,000 x $2.00, or $1,600,000 The journal entry to record the transaction would be: In the above example, shareholders would need to be informed that $400,000 / 800,000, or $0.50 per share were regular dividends, while $1.50 per share represents a liquidating dividend.

Decrease in retained earnings follows the distribution of dividends. Let’s assume that the Lie Dharma Corporation, on March 15, 2009, declared a cash dividend of $1 per share on 2,000,000 shares payable June 1, 2009, to all stockholders of record April 15. At the date of distribution, the firm debits the note payable or scrip payable, and the related interest expense and credit cash. Notes Payable to Stockholders [Scrip Dividends Payable] = 3,000,000 [$1 x 3,000,000] 2. No corporate assets are distributed; the value of the total stockholder’s equity remains unchanged as well as each stockholder’s percentage ownership in the firm. Common Stock, $20 par = 120,000 Following the issuance the stockholder’s equity is as follows: Common Stock, $20 par [36,000 shares issued and outstanding] = $ 720,000 Additional Paid-in-Capital = 330,000 Total Stockholders’ Equity = $1,500,000 Let’s now assume that the firm issued instead a 50% stock dividend.

,600,000 The journal entry to record the transaction would be: In the above example, shareholders would need to be informed that 0,000 / 800,000, or

This is usually the case in bankruptcy liquidations.Established since 2007, hosts more than 1300 articles (still growing), and has helped millions accounting student, teacher, junior accountants and small business owners, worldwide.The term liquidating dividend refers to the process of providing shareholders with a partial or full distribution of their capital investment in the company.Liquidating dividends are typically paid when a company is going out of business or has sold a portion of the enterprise.Also known as liquidating distributions, a liquidating dividend is a return of the company's shareholders' capital investment.

.50 per share were regular dividends, while

On its books, these shares were recorded at their cost of $10,000. If the fair market value had been less than the book value, a loss, rather than a gain, would have been recognized.If a corporation wishes to pay a cash dividend but has no cash at the moment, it may issue a special type of note payable to the stockholders promising to pay later. If the scrip pays interest, the interest portion of the payment should be debited to Interest Expense and not be treated as part of the dividend.The following entry is required: Cash Paid = Shares of Common Stock x Dividend = 800,000 x $2.00, or $1,600,000 The journal entry to record the transaction would be: In the above example, shareholders would need to be informed that $400,000 / 800,000, or $0.50 per share were regular dividends, while $1.50 per share represents a liquidating dividend.Decrease in retained earnings follows the distribution of dividends. Let’s assume that the Lie Dharma Corporation, on March 15, 2009, declared a cash dividend of $1 per share on 2,000,000 shares payable June 1, 2009, to all stockholders of record April 15. At the date of distribution, the firm debits the note payable or scrip payable, and the related interest expense and credit cash. Notes Payable to Stockholders [Scrip Dividends Payable] = 3,000,000 [$1 x 3,000,000] 2. No corporate assets are distributed; the value of the total stockholder’s equity remains unchanged as well as each stockholder’s percentage ownership in the firm. Common Stock, $20 par = 120,000 Following the issuance the stockholder’s equity is as follows: Common Stock, $20 par [36,000 shares issued and outstanding] = $ 720,000 Additional Paid-in-Capital = 330,000 Total Stockholders’ Equity = $1,500,000 Let’s now assume that the firm issued instead a 50% stock dividend.The types of dividends include [1] cash, [2] property, [3] scrip, [4] liquidating, and [5] stock. Let’s assume that the Hugo Company declared, on June 17, 2009, a scrip dividend in the form of a three-month promissory note amount to $1 a share on 3,000,000 shares outstanding. At the date of payment, September 17, 2009 [Debit]. Interest Expense = 75,000 [$3,000,000 x 0.10 x 3/12] [Credit]. To illustrate the accounting for small stock dividend, let’s assume a corporation that has the following stockholder’s equity prior to the issuance of a small stock dividend: Common Stock, $20 par [30,000 shares issued and outstanding] = $ 600,000 Additional Paid-in-Capital = 300,000 Total Stockholder’s Equity = $1,500,000 Let’s also assume that the firm issued a 20% stock dividend on a date where the stock was selling at $25 per share. The following journal entries are required at the time of declaration: [Debit].With the exception of stock dividends, all the other dividends reduce the stockholder’s equity in the corporation. Cash = 3,075,000 Dividends paid based on other than retained earnings are called “liquidating dividends”, as a return of contributed capital rather than a distribution of retained earnings. Retained Earnings 50% [30,000 share x $20] = 300,000 [Credit].Creditors are always senior to shareholders in receiving the corporation's assets upon winding up.However, in case all debts to creditors have been fully satisfied, there is a surplus left to divide among equity-holders.

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On its books, these shares were recorded at their cost of $10,000. If the fair market value had been less than the book value, a loss, rather than a gain, would have been recognized.

If a corporation wishes to pay a cash dividend but has no cash at the moment, it may issue a special type of note payable to the stockholders promising to pay later. If the scrip pays interest, the interest portion of the payment should be debited to Interest Expense and not be treated as part of the dividend.

The following entry is required: Cash Paid = Shares of Common Stock x Dividend = 800,000 x $2.00, or $1,600,000 The journal entry to record the transaction would be: In the above example, shareholders would need to be informed that $400,000 / 800,000, or $0.50 per share were regular dividends, while $1.50 per share represents a liquidating dividend.

Decrease in retained earnings follows the distribution of dividends. Let’s assume that the Lie Dharma Corporation, on March 15, 2009, declared a cash dividend of $1 per share on 2,000,000 shares payable June 1, 2009, to all stockholders of record April 15. At the date of distribution, the firm debits the note payable or scrip payable, and the related interest expense and credit cash. Notes Payable to Stockholders [Scrip Dividends Payable] = 3,000,000 [$1 x 3,000,000] 2. No corporate assets are distributed; the value of the total stockholder’s equity remains unchanged as well as each stockholder’s percentage ownership in the firm. Common Stock, $20 par = 120,000 Following the issuance the stockholder’s equity is as follows: Common Stock, $20 par [36,000 shares issued and outstanding] = $ 720,000 Additional Paid-in-Capital = 330,000 Total Stockholders’ Equity = $1,500,000 Let’s now assume that the firm issued instead a 50% stock dividend.

.50 per share represents a liquidating dividend.Decrease in retained earnings follows the distribution of dividends. Let’s assume that the Lie Dharma Corporation, on March 15, 2009, declared a cash dividend of

On its books, these shares were recorded at their cost of $10,000. If the fair market value had been less than the book value, a loss, rather than a gain, would have been recognized.If a corporation wishes to pay a cash dividend but has no cash at the moment, it may issue a special type of note payable to the stockholders promising to pay later. If the scrip pays interest, the interest portion of the payment should be debited to Interest Expense and not be treated as part of the dividend.The following entry is required: Cash Paid = Shares of Common Stock x Dividend = 800,000 x $2.00, or $1,600,000 The journal entry to record the transaction would be: In the above example, shareholders would need to be informed that $400,000 / 800,000, or $0.50 per share were regular dividends, while $1.50 per share represents a liquidating dividend.Decrease in retained earnings follows the distribution of dividends. Let’s assume that the Lie Dharma Corporation, on March 15, 2009, declared a cash dividend of $1 per share on 2,000,000 shares payable June 1, 2009, to all stockholders of record April 15. At the date of distribution, the firm debits the note payable or scrip payable, and the related interest expense and credit cash. Notes Payable to Stockholders [Scrip Dividends Payable] = 3,000,000 [$1 x 3,000,000] 2. No corporate assets are distributed; the value of the total stockholder’s equity remains unchanged as well as each stockholder’s percentage ownership in the firm. Common Stock, $20 par = 120,000 Following the issuance the stockholder’s equity is as follows: Common Stock, $20 par [36,000 shares issued and outstanding] = $ 720,000 Additional Paid-in-Capital = 330,000 Total Stockholders’ Equity = $1,500,000 Let’s now assume that the firm issued instead a 50% stock dividend.The types of dividends include [1] cash, [2] property, [3] scrip, [4] liquidating, and [5] stock. Let’s assume that the Hugo Company declared, on June 17, 2009, a scrip dividend in the form of a three-month promissory note amount to $1 a share on 3,000,000 shares outstanding. At the date of payment, September 17, 2009 [Debit]. Interest Expense = 75,000 [$3,000,000 x 0.10 x 3/12] [Credit]. To illustrate the accounting for small stock dividend, let’s assume a corporation that has the following stockholder’s equity prior to the issuance of a small stock dividend: Common Stock, $20 par [30,000 shares issued and outstanding] = $ 600,000 Additional Paid-in-Capital = 300,000 Total Stockholder’s Equity = $1,500,000 Let’s also assume that the firm issued a 20% stock dividend on a date where the stock was selling at $25 per share. The following journal entries are required at the time of declaration: [Debit].With the exception of stock dividends, all the other dividends reduce the stockholder’s equity in the corporation. Cash = 3,075,000 Dividends paid based on other than retained earnings are called “liquidating dividends”, as a return of contributed capital rather than a distribution of retained earnings. Retained Earnings 50% [30,000 share x $20] = 300,000 [Credit].Creditors are always senior to shareholders in receiving the corporation's assets upon winding up.However, in case all debts to creditors have been fully satisfied, there is a surplus left to divide among equity-holders.

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On its books, these shares were recorded at their cost of $10,000. If the fair market value had been less than the book value, a loss, rather than a gain, would have been recognized.

If a corporation wishes to pay a cash dividend but has no cash at the moment, it may issue a special type of note payable to the stockholders promising to pay later. If the scrip pays interest, the interest portion of the payment should be debited to Interest Expense and not be treated as part of the dividend.

The following entry is required: Cash Paid = Shares of Common Stock x Dividend = 800,000 x $2.00, or $1,600,000 The journal entry to record the transaction would be: In the above example, shareholders would need to be informed that $400,000 / 800,000, or $0.50 per share were regular dividends, while $1.50 per share represents a liquidating dividend.

Decrease in retained earnings follows the distribution of dividends. Let’s assume that the Lie Dharma Corporation, on March 15, 2009, declared a cash dividend of $1 per share on 2,000,000 shares payable June 1, 2009, to all stockholders of record April 15. At the date of distribution, the firm debits the note payable or scrip payable, and the related interest expense and credit cash. Notes Payable to Stockholders [Scrip Dividends Payable] = 3,000,000 [$1 x 3,000,000] 2. No corporate assets are distributed; the value of the total stockholder’s equity remains unchanged as well as each stockholder’s percentage ownership in the firm. Common Stock, $20 par = 120,000 Following the issuance the stockholder’s equity is as follows: Common Stock, $20 par [36,000 shares issued and outstanding] = $ 720,000 Additional Paid-in-Capital = 330,000 Total Stockholders’ Equity = $1,500,000 Let’s now assume that the firm issued instead a 50% stock dividend.

per share on 2,000,000 shares payable June 1, 2009, to all stockholders of record April 15. At the date of distribution, the firm debits the note payable or scrip payable, and the related interest expense and credit cash. Notes Payable to Stockholders [Scrip Dividends Payable] = 3,000,000 [

On its books, these shares were recorded at their cost of $10,000. If the fair market value had been less than the book value, a loss, rather than a gain, would have been recognized.If a corporation wishes to pay a cash dividend but has no cash at the moment, it may issue a special type of note payable to the stockholders promising to pay later. If the scrip pays interest, the interest portion of the payment should be debited to Interest Expense and not be treated as part of the dividend.The following entry is required: Cash Paid = Shares of Common Stock x Dividend = 800,000 x $2.00, or $1,600,000 The journal entry to record the transaction would be: In the above example, shareholders would need to be informed that $400,000 / 800,000, or $0.50 per share were regular dividends, while $1.50 per share represents a liquidating dividend.Decrease in retained earnings follows the distribution of dividends. Let’s assume that the Lie Dharma Corporation, on March 15, 2009, declared a cash dividend of $1 per share on 2,000,000 shares payable June 1, 2009, to all stockholders of record April 15. At the date of distribution, the firm debits the note payable or scrip payable, and the related interest expense and credit cash. Notes Payable to Stockholders [Scrip Dividends Payable] = 3,000,000 [$1 x 3,000,000] 2. No corporate assets are distributed; the value of the total stockholder’s equity remains unchanged as well as each stockholder’s percentage ownership in the firm. Common Stock, $20 par = 120,000 Following the issuance the stockholder’s equity is as follows: Common Stock, $20 par [36,000 shares issued and outstanding] = $ 720,000 Additional Paid-in-Capital = 330,000 Total Stockholders’ Equity = $1,500,000 Let’s now assume that the firm issued instead a 50% stock dividend.The types of dividends include [1] cash, [2] property, [3] scrip, [4] liquidating, and [5] stock. Let’s assume that the Hugo Company declared, on June 17, 2009, a scrip dividend in the form of a three-month promissory note amount to $1 a share on 3,000,000 shares outstanding. At the date of payment, September 17, 2009 [Debit]. Interest Expense = 75,000 [$3,000,000 x 0.10 x 3/12] [Credit]. To illustrate the accounting for small stock dividend, let’s assume a corporation that has the following stockholder’s equity prior to the issuance of a small stock dividend: Common Stock, $20 par [30,000 shares issued and outstanding] = $ 600,000 Additional Paid-in-Capital = 300,000 Total Stockholder’s Equity = $1,500,000 Let’s also assume that the firm issued a 20% stock dividend on a date where the stock was selling at $25 per share. The following journal entries are required at the time of declaration: [Debit].With the exception of stock dividends, all the other dividends reduce the stockholder’s equity in the corporation. Cash = 3,075,000 Dividends paid based on other than retained earnings are called “liquidating dividends”, as a return of contributed capital rather than a distribution of retained earnings. Retained Earnings 50% [30,000 share x $20] = 300,000 [Credit].Creditors are always senior to shareholders in receiving the corporation's assets upon winding up.However, in case all debts to creditors have been fully satisfied, there is a surplus left to divide among equity-holders.

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On its books, these shares were recorded at their cost of $10,000. If the fair market value had been less than the book value, a loss, rather than a gain, would have been recognized.

If a corporation wishes to pay a cash dividend but has no cash at the moment, it may issue a special type of note payable to the stockholders promising to pay later. If the scrip pays interest, the interest portion of the payment should be debited to Interest Expense and not be treated as part of the dividend.

The following entry is required: Cash Paid = Shares of Common Stock x Dividend = 800,000 x $2.00, or $1,600,000 The journal entry to record the transaction would be: In the above example, shareholders would need to be informed that $400,000 / 800,000, or $0.50 per share were regular dividends, while $1.50 per share represents a liquidating dividend.

Decrease in retained earnings follows the distribution of dividends. Let’s assume that the Lie Dharma Corporation, on March 15, 2009, declared a cash dividend of $1 per share on 2,000,000 shares payable June 1, 2009, to all stockholders of record April 15. At the date of distribution, the firm debits the note payable or scrip payable, and the related interest expense and credit cash. Notes Payable to Stockholders [Scrip Dividends Payable] = 3,000,000 [$1 x 3,000,000] 2. No corporate assets are distributed; the value of the total stockholder’s equity remains unchanged as well as each stockholder’s percentage ownership in the firm. Common Stock, $20 par = 120,000 Following the issuance the stockholder’s equity is as follows: Common Stock, $20 par [36,000 shares issued and outstanding] = $ 720,000 Additional Paid-in-Capital = 330,000 Total Stockholders’ Equity = $1,500,000 Let’s now assume that the firm issued instead a 50% stock dividend.

x 3,000,000] 2. No corporate assets are distributed; the value of the total stockholder’s equity remains unchanged as well as each stockholder’s percentage ownership in the firm. Common Stock, par = 120,000 Following the issuance the stockholder’s equity is as follows: Common Stock, par [36,000 shares issued and outstanding] = $ 720,000 Additional Paid-in-Capital = 330,000 Total Stockholders’ Equity =

On its books, these shares were recorded at their cost of $10,000. If the fair market value had been less than the book value, a loss, rather than a gain, would have been recognized.If a corporation wishes to pay a cash dividend but has no cash at the moment, it may issue a special type of note payable to the stockholders promising to pay later. If the scrip pays interest, the interest portion of the payment should be debited to Interest Expense and not be treated as part of the dividend.The following entry is required: Cash Paid = Shares of Common Stock x Dividend = 800,000 x $2.00, or $1,600,000 The journal entry to record the transaction would be: In the above example, shareholders would need to be informed that $400,000 / 800,000, or $0.50 per share were regular dividends, while $1.50 per share represents a liquidating dividend.Decrease in retained earnings follows the distribution of dividends. Let’s assume that the Lie Dharma Corporation, on March 15, 2009, declared a cash dividend of $1 per share on 2,000,000 shares payable June 1, 2009, to all stockholders of record April 15. At the date of distribution, the firm debits the note payable or scrip payable, and the related interest expense and credit cash. Notes Payable to Stockholders [Scrip Dividends Payable] = 3,000,000 [$1 x 3,000,000] 2. No corporate assets are distributed; the value of the total stockholder’s equity remains unchanged as well as each stockholder’s percentage ownership in the firm. Common Stock, $20 par = 120,000 Following the issuance the stockholder’s equity is as follows: Common Stock, $20 par [36,000 shares issued and outstanding] = $ 720,000 Additional Paid-in-Capital = 330,000 Total Stockholders’ Equity = $1,500,000 Let’s now assume that the firm issued instead a 50% stock dividend.The types of dividends include [1] cash, [2] property, [3] scrip, [4] liquidating, and [5] stock. Let’s assume that the Hugo Company declared, on June 17, 2009, a scrip dividend in the form of a three-month promissory note amount to $1 a share on 3,000,000 shares outstanding. At the date of payment, September 17, 2009 [Debit]. Interest Expense = 75,000 [$3,000,000 x 0.10 x 3/12] [Credit]. To illustrate the accounting for small stock dividend, let’s assume a corporation that has the following stockholder’s equity prior to the issuance of a small stock dividend: Common Stock, $20 par [30,000 shares issued and outstanding] = $ 600,000 Additional Paid-in-Capital = 300,000 Total Stockholder’s Equity = $1,500,000 Let’s also assume that the firm issued a 20% stock dividend on a date where the stock was selling at $25 per share. The following journal entries are required at the time of declaration: [Debit].With the exception of stock dividends, all the other dividends reduce the stockholder’s equity in the corporation. Cash = 3,075,000 Dividends paid based on other than retained earnings are called “liquidating dividends”, as a return of contributed capital rather than a distribution of retained earnings. Retained Earnings 50% [30,000 share x $20] = 300,000 [Credit].Creditors are always senior to shareholders in receiving the corporation's assets upon winding up.However, in case all debts to creditors have been fully satisfied, there is a surplus left to divide among equity-holders.

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On its books, these shares were recorded at their cost of $10,000. If the fair market value had been less than the book value, a loss, rather than a gain, would have been recognized.

If a corporation wishes to pay a cash dividend but has no cash at the moment, it may issue a special type of note payable to the stockholders promising to pay later. If the scrip pays interest, the interest portion of the payment should be debited to Interest Expense and not be treated as part of the dividend.

The following entry is required: Cash Paid = Shares of Common Stock x Dividend = 800,000 x $2.00, or $1,600,000 The journal entry to record the transaction would be: In the above example, shareholders would need to be informed that $400,000 / 800,000, or $0.50 per share were regular dividends, while $1.50 per share represents a liquidating dividend.

Decrease in retained earnings follows the distribution of dividends. Let’s assume that the Lie Dharma Corporation, on March 15, 2009, declared a cash dividend of $1 per share on 2,000,000 shares payable June 1, 2009, to all stockholders of record April 15. At the date of distribution, the firm debits the note payable or scrip payable, and the related interest expense and credit cash. Notes Payable to Stockholders [Scrip Dividends Payable] = 3,000,000 [$1 x 3,000,000] 2. No corporate assets are distributed; the value of the total stockholder’s equity remains unchanged as well as each stockholder’s percentage ownership in the firm. Common Stock, $20 par = 120,000 Following the issuance the stockholder’s equity is as follows: Common Stock, $20 par [36,000 shares issued and outstanding] = $ 720,000 Additional Paid-in-Capital = 330,000 Total Stockholders’ Equity = $1,500,000 Let’s now assume that the firm issued instead a 50% stock dividend.

,500,000 Let’s now assume that the firm issued instead a 50% stock dividend.The types of dividends include [1] cash, [2] property, [3] scrip, [4] liquidating, and [5] stock. Let’s assume that the Hugo Company declared, on June 17, 2009, a scrip dividend in the form of a three-month promissory note amount to

On its books, these shares were recorded at their cost of $10,000. If the fair market value had been less than the book value, a loss, rather than a gain, would have been recognized.If a corporation wishes to pay a cash dividend but has no cash at the moment, it may issue a special type of note payable to the stockholders promising to pay later. If the scrip pays interest, the interest portion of the payment should be debited to Interest Expense and not be treated as part of the dividend.The following entry is required: Cash Paid = Shares of Common Stock x Dividend = 800,000 x $2.00, or $1,600,000 The journal entry to record the transaction would be: In the above example, shareholders would need to be informed that $400,000 / 800,000, or $0.50 per share were regular dividends, while $1.50 per share represents a liquidating dividend.Decrease in retained earnings follows the distribution of dividends. Let’s assume that the Lie Dharma Corporation, on March 15, 2009, declared a cash dividend of $1 per share on 2,000,000 shares payable June 1, 2009, to all stockholders of record April 15. At the date of distribution, the firm debits the note payable or scrip payable, and the related interest expense and credit cash. Notes Payable to Stockholders [Scrip Dividends Payable] = 3,000,000 [$1 x 3,000,000] 2. No corporate assets are distributed; the value of the total stockholder’s equity remains unchanged as well as each stockholder’s percentage ownership in the firm. Common Stock, $20 par = 120,000 Following the issuance the stockholder’s equity is as follows: Common Stock, $20 par [36,000 shares issued and outstanding] = $ 720,000 Additional Paid-in-Capital = 330,000 Total Stockholders’ Equity = $1,500,000 Let’s now assume that the firm issued instead a 50% stock dividend.The types of dividends include [1] cash, [2] property, [3] scrip, [4] liquidating, and [5] stock. Let’s assume that the Hugo Company declared, on June 17, 2009, a scrip dividend in the form of a three-month promissory note amount to $1 a share on 3,000,000 shares outstanding. At the date of payment, September 17, 2009 [Debit]. Interest Expense = 75,000 [$3,000,000 x 0.10 x 3/12] [Credit]. To illustrate the accounting for small stock dividend, let’s assume a corporation that has the following stockholder’s equity prior to the issuance of a small stock dividend: Common Stock, $20 par [30,000 shares issued and outstanding] = $ 600,000 Additional Paid-in-Capital = 300,000 Total Stockholder’s Equity = $1,500,000 Let’s also assume that the firm issued a 20% stock dividend on a date where the stock was selling at $25 per share. The following journal entries are required at the time of declaration: [Debit].With the exception of stock dividends, all the other dividends reduce the stockholder’s equity in the corporation. Cash = 3,075,000 Dividends paid based on other than retained earnings are called “liquidating dividends”, as a return of contributed capital rather than a distribution of retained earnings. Retained Earnings 50% [30,000 share x $20] = 300,000 [Credit].Creditors are always senior to shareholders in receiving the corporation's assets upon winding up.However, in case all debts to creditors have been fully satisfied, there is a surplus left to divide among equity-holders.

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On its books, these shares were recorded at their cost of $10,000. If the fair market value had been less than the book value, a loss, rather than a gain, would have been recognized.

If a corporation wishes to pay a cash dividend but has no cash at the moment, it may issue a special type of note payable to the stockholders promising to pay later. If the scrip pays interest, the interest portion of the payment should be debited to Interest Expense and not be treated as part of the dividend.

The following entry is required: Cash Paid = Shares of Common Stock x Dividend = 800,000 x $2.00, or $1,600,000 The journal entry to record the transaction would be: In the above example, shareholders would need to be informed that $400,000 / 800,000, or $0.50 per share were regular dividends, while $1.50 per share represents a liquidating dividend.

Decrease in retained earnings follows the distribution of dividends. Let’s assume that the Lie Dharma Corporation, on March 15, 2009, declared a cash dividend of $1 per share on 2,000,000 shares payable June 1, 2009, to all stockholders of record April 15. At the date of distribution, the firm debits the note payable or scrip payable, and the related interest expense and credit cash. Notes Payable to Stockholders [Scrip Dividends Payable] = 3,000,000 [$1 x 3,000,000] 2. No corporate assets are distributed; the value of the total stockholder’s equity remains unchanged as well as each stockholder’s percentage ownership in the firm. Common Stock, $20 par = 120,000 Following the issuance the stockholder’s equity is as follows: Common Stock, $20 par [36,000 shares issued and outstanding] = $ 720,000 Additional Paid-in-Capital = 330,000 Total Stockholders’ Equity = $1,500,000 Let’s now assume that the firm issued instead a 50% stock dividend.

a share on 3,000,000 shares outstanding. At the date of payment, September 17, 2009 [Debit]. Interest Expense = 75,000 [,000,000 x 0.10 x 3/12] [Credit]. To illustrate the accounting for small stock dividend, let’s assume a corporation that has the following stockholder’s equity prior to the issuance of a small stock dividend: Common Stock, par [30,000 shares issued and outstanding] = $ 600,000 Additional Paid-in-Capital = 300,000 Total Stockholder’s Equity =

On its books, these shares were recorded at their cost of $10,000. If the fair market value had been less than the book value, a loss, rather than a gain, would have been recognized.If a corporation wishes to pay a cash dividend but has no cash at the moment, it may issue a special type of note payable to the stockholders promising to pay later. If the scrip pays interest, the interest portion of the payment should be debited to Interest Expense and not be treated as part of the dividend.The following entry is required: Cash Paid = Shares of Common Stock x Dividend = 800,000 x $2.00, or $1,600,000 The journal entry to record the transaction would be: In the above example, shareholders would need to be informed that $400,000 / 800,000, or $0.50 per share were regular dividends, while $1.50 per share represents a liquidating dividend.Decrease in retained earnings follows the distribution of dividends. Let’s assume that the Lie Dharma Corporation, on March 15, 2009, declared a cash dividend of $1 per share on 2,000,000 shares payable June 1, 2009, to all stockholders of record April 15. At the date of distribution, the firm debits the note payable or scrip payable, and the related interest expense and credit cash. Notes Payable to Stockholders [Scrip Dividends Payable] = 3,000,000 [$1 x 3,000,000] 2. No corporate assets are distributed; the value of the total stockholder’s equity remains unchanged as well as each stockholder’s percentage ownership in the firm. Common Stock, $20 par = 120,000 Following the issuance the stockholder’s equity is as follows: Common Stock, $20 par [36,000 shares issued and outstanding] = $ 720,000 Additional Paid-in-Capital = 330,000 Total Stockholders’ Equity = $1,500,000 Let’s now assume that the firm issued instead a 50% stock dividend.The types of dividends include [1] cash, [2] property, [3] scrip, [4] liquidating, and [5] stock. Let’s assume that the Hugo Company declared, on June 17, 2009, a scrip dividend in the form of a three-month promissory note amount to $1 a share on 3,000,000 shares outstanding. At the date of payment, September 17, 2009 [Debit]. Interest Expense = 75,000 [$3,000,000 x 0.10 x 3/12] [Credit]. To illustrate the accounting for small stock dividend, let’s assume a corporation that has the following stockholder’s equity prior to the issuance of a small stock dividend: Common Stock, $20 par [30,000 shares issued and outstanding] = $ 600,000 Additional Paid-in-Capital = 300,000 Total Stockholder’s Equity = $1,500,000 Let’s also assume that the firm issued a 20% stock dividend on a date where the stock was selling at $25 per share. The following journal entries are required at the time of declaration: [Debit].With the exception of stock dividends, all the other dividends reduce the stockholder’s equity in the corporation. Cash = 3,075,000 Dividends paid based on other than retained earnings are called “liquidating dividends”, as a return of contributed capital rather than a distribution of retained earnings. Retained Earnings 50% [30,000 share x $20] = 300,000 [Credit].Creditors are always senior to shareholders in receiving the corporation's assets upon winding up.However, in case all debts to creditors have been fully satisfied, there is a surplus left to divide among equity-holders.

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On its books, these shares were recorded at their cost of $10,000. If the fair market value had been less than the book value, a loss, rather than a gain, would have been recognized.

If a corporation wishes to pay a cash dividend but has no cash at the moment, it may issue a special type of note payable to the stockholders promising to pay later. If the scrip pays interest, the interest portion of the payment should be debited to Interest Expense and not be treated as part of the dividend.

The following entry is required: Cash Paid = Shares of Common Stock x Dividend = 800,000 x $2.00, or $1,600,000 The journal entry to record the transaction would be: In the above example, shareholders would need to be informed that $400,000 / 800,000, or $0.50 per share were regular dividends, while $1.50 per share represents a liquidating dividend.

Decrease in retained earnings follows the distribution of dividends. Let’s assume that the Lie Dharma Corporation, on March 15, 2009, declared a cash dividend of $1 per share on 2,000,000 shares payable June 1, 2009, to all stockholders of record April 15. At the date of distribution, the firm debits the note payable or scrip payable, and the related interest expense and credit cash. Notes Payable to Stockholders [Scrip Dividends Payable] = 3,000,000 [$1 x 3,000,000] 2. No corporate assets are distributed; the value of the total stockholder’s equity remains unchanged as well as each stockholder’s percentage ownership in the firm. Common Stock, $20 par = 120,000 Following the issuance the stockholder’s equity is as follows: Common Stock, $20 par [36,000 shares issued and outstanding] = $ 720,000 Additional Paid-in-Capital = 330,000 Total Stockholders’ Equity = $1,500,000 Let’s now assume that the firm issued instead a 50% stock dividend.

,500,000 Let’s also assume that the firm issued a 20% stock dividend on a date where the stock was selling at per share. The following journal entries are required at the time of declaration: [Debit].With the exception of stock dividends, all the other dividends reduce the stockholder’s equity in the corporation. Cash = 3,075,000 Dividends paid based on other than retained earnings are called “liquidating dividends”, as a return of contributed capital rather than a distribution of retained earnings. Retained Earnings 50% [30,000 share x ] = 300,000 [Credit].Creditors are always senior to shareholders in receiving the corporation's assets upon winding up.However, in case all debts to creditors have been fully satisfied, there is a surplus left to divide among equity-holders.

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This is usually the case in bankruptcy liquidations.

Established since 2007, hosts more than 1300 articles (still growing), and has helped millions accounting student, teacher, junior accountants and small business owners, worldwide.

The term liquidating dividend refers to the process of providing shareholders with a partial or full distribution of their capital investment in the company.

Liquidating dividends are typically paid when a company is going out of business or has sold a portion of the enterprise.

Also known as liquidating distributions, a liquidating dividend is a return of the company's shareholders' capital investment.

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This is usually the case in bankruptcy liquidations.Established since 2007, hosts more than 1300 articles (still growing), and has helped millions accounting student, teacher, junior accountants and small business owners, worldwide.The term liquidating dividend refers to the process of providing shareholders with a partial or full distribution of their capital investment in the company.Liquidating dividends are typically paid when a company is going out of business or has sold a portion of the enterprise.Also known as liquidating distributions, a liquidating dividend is a return of the company's shareholders' capital investment.

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