Stock Splits
Memo entries are used to record stock splits.
- Stock splits involve changes in the features (par) and number of shares.
- Example: 600 shares of C/S outstanding, $20 par, when the market price per share is $30. 2:1 split is announced.
- No formal journal entry is recorded.
Old New
600 shares 1,200 shares
x $20 par x $10 par
$12,000 $12,000 Total
Please review the difference between a stock split and large stock dividends.