In accounting, does a 2-for-1 stock split...?
Require a journal entry? Also, does the number of shares outstanding decrease?
Other - Business & Finance - 3 Answers
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Answer 1 :
Require a journal entry? since asset neither increased nor decreased, I'd say no but not sure. Also, does the number of shares outstanding decrease? Since it's same amount, I'd say remain the same but not sure.
Answer 2 :
Since you specify 'split', I assume you mean each existing old share is exchanged for 2 news shares, so plainly the number of share outstanding doubles. Since number of shares are factored into Earnings per Shae calculations, plainly the fact of the split has to be recorded somehow, so i would say 'yes' (you would show all the old shares being canceled, new ones issued)
Answer 3 :
Answer: Stock split does not require a journal entry. It only requires memorandum entry (notes). Total number of shares outstanding will decrease but the total stockholders' equity remains the same.
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