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
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 in 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 BSc from Loughborough University.

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