issue of shares

On January 1, 2012, Brown Corporation had $2,000,000 common shares (200,000 issued) and retained earnings of $1,000,000. The company issued 100,000 common shares at $13 per share on July 1. On December 15, the board of directors declared a 10% stock dividend to shareholders of record on December 31, 2012, payable on January 15, 2013. The market value of Brown Corporation shares was $16 per share on December 15 and $14 per share on December 31. Net earnings for 2006 were $500,000. 1. Journalize the issue of shares on July 1 and the declaration of the stock dividend on December 15. 2. Prepare the shareholders’ equity section of the balance sheet for Brown Corporation at December 31, 2012.