Accounting and securities market differences

Reference no: EM13144251

The common stock of Alexander Hamilton Inc. is currently selling at $120 per share. The directors wish to reduce the share price and increase share volume prior to a new issue. The per share par value is $10; book value is $70 per share. Nine million shares are issued
and outstanding.

Instructions

Prepare the necessary journal entries assuming the following.

(a) The board votes a 2-for-1 stock split.

(b) The board votes a 100% stock dividend.

(c) Briefly discuss the accounting and securities market differences between these two methods of increasing the number of shares outstanding.

Reference no: EM13144251

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