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Stockholders Equity Journal Entries
The stockholders equity journal entries below act as a quick reference, and set out the most commonly encountered situations when dealing with the double entry posting of stockholders equity.
In each case the stockholders equity journal entries show the debit and credit account together with a brief narrative. For a fuller explanation of journal entries, view our examples section.
Typical Stockholders Equity Journal Entries
To issue Common stock at par value or no par value for cash
Account
Debit
Credit
Cash
XXX
Common stock
XXX
To issue Common stock above par value for cash
Account
Debit
Credit
Cash
XXX
Common stock
XXX
APIC – Common stock
XXX
*APIC = Additional paid in capital or premium
To issue Common stock above par value for property
Account
Debit
Credit
Property (fair value)
XXX
Common stock
XXX
APIC – Common stock
XXX
To issue Common stock above par value for services
Account
Debit
Credit
Expenses (fair value)
XXX
Common stock
XXX
APIC – Common stock
XXX
To issue Preferred stock at par value
Account
Debit
Credit
Cash
XXX
Preferred stock
XXX
To issue Preferred stock above par value
Account
Debit
Credit
Cash
XXX
Preferred stock
XXX
APIC – Preferred stock
XXX
A cash dividend is declared
Account
Debit
Credit
Retained earnings
XXX
Dividends payable
XXX
A cash dividend is paid
Account
Debit
Credit
Dividends payable
XXX
Cash
XXX
A stock dividend is declared
Account
Debit
Credit
Retained earnings
XXX
Common stock dividends distributable
XXX
APIC – Common stock
XXX
A stock dividend is issued
Account
Debit
Credit
Common stock dividends distributable
XXX
Common stock
XXX
Note on terminology for stockholders equity journal entries
In the UK Stockholders are usually called Shareholders, so stockholders equity becomes shareholders equity. In addition, the equivalent of Common stock is termed Ordinary shares, and Preference Stock becomes Preferred shares.
Last modified November 13th, 2019 by Michael Brown
About the Author
Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and consultant for more than 25 years and has built financial models for all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a degree from Loughborough University.