CEVAP:

After the decision of paying share dividends, similar to the cash dividends distributions, three dates are important for a corporation. These are: Declaration date, Record date and Distribution date. At first, on the declaration date, the corporation has declared its intention to distribute its shares. A journal entry is required to show the change between shareholders’ equity items. Secondly, the corporation determines the shareholders who receive share dividends separately on the record date. In this case, a new journal entry is not required. Because this determination has no financial effect. Finally, the corporation distributes the dividend that is determined to the shareholders on the distribution date and a new journal entry should be prepared. Briefly, on the declaration date and distribution date journal entries are required in the process of accounting for cash dividends.