On September 1, a Corporation Had 50,000 $5 Par Value

question 67

Multiple Choice

On September 1, a corporation had 50,000 $5 par value ordinary shares, and $1,000,000 of retained earnings. On that date, when the market price of the share is $15 per share, the corporation issues a 2-for-1 share split. The general journal entry to record this transaction is:

• A) Debit Retained Earnings $750,000; credit Share Capital-Ordinary Split Distributable $750,000.
• B) Debit Retained Earnings $750,000; credit Share Capital-Ordinary $750,000.
• C) Debit Retained Earnings $250,000; credit Share Capital-Ordinary $250,000.
• D) Debit Retained Earnings $250,000; credit Share Split Payable $250,000.
• E) No entry is made for this transaction.

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