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What journal entry is required to account for a 2 for 1 stock split?

Asked by: Emel Schielin

asked in category: General Last Updated: 27th March, 2020

What journal entry is required to account for a 2 for 1 stock split?

The only journal entry needed for a stock split is a memo entry to note that the number of shares has changed and that the par value per share has changed (if the stock has a par value).

Furthermore, is a journal entry required for a stock split?

A stock split does not require any journal entries in the accounting records as there has been no change in the total equity of the business. A memo entry is normally made to reflect the fact that the split has occurred and that the par value has changed proportionally.

Additionally, what is the journal entry for stock dividend? Small Stock DividendAt the time of issuance of stock the stock dividends distributable is debited by the full amount, common stock is credited by amount equal to the product of par value per share, stock dividend percentage and the number of current shares outstanding.

Consequently, how do you record a 2 for 1 stock split?

Multiply the number of shares outstanding pre-split by the x:y ratio to get the new number of shares outstanding. For example, in the 2-for-1 split example above, you would multiply the 100,000 shares outstanding before the split by 2, to get 200,000 shares outstanding after the split.

What is split in accounting?

Use split accounting to share the cost of an item among multiple accounting groups. For example, split the price of a new database server among the departments who will use it, or the cost of business travel, or an adjustment. Initially, two accounting splits, each with identical accounting information, are displayed.

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