stockholders equity journal entries

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
AccountDebitCredit
CashXXX
Common stockXXX
To issue Common stock above par value for cash
AccountDebitCredit
CashXXX
Common stockXXX
APIC – Common stockXXX

*APIC = Additional paid in capital or premium

To issue Common stock above par value for property
AccountDebitCredit
Property (fair value)XXX
Common stockXXX
APIC – Common stockXXX
To issue Common stock above par value for services
AccountDebitCredit
Expenses (fair value)XXX
Common stockXXX
APIC – Common stockXXX
To issue Preferred stock at par value
AccountDebitCredit
CashXXX
Preferred stockXXX
To issue Preferred stock above par value
AccountDebitCredit
CashXXX
Preferred stockXXX
APIC – Preferred stockXXX
A cash dividend is declared
AccountDebitCredit
Retained earningsXXX
Dividends payableXXX
A cash dividend is paid
AccountDebitCredit
Dividends payableXXX
CashXXX
A stock dividend is declared
AccountDebitCredit
Retained earningsXXX
Common stock dividends distributableXXX
APIC – Common stockXXX
A stock dividend is issued
AccountDebitCredit
Common stock dividends distributableXXX
Common stockXXX

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.

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