Stock splits reduce the par or stated value of a corporation's common stock, by issuing a proportionate number of additional shares. The purpose of stock splits is to reduce the market value of shares and encourage more investors to purchase shares of stock. Shareholders do not lose any equity or fractional share of company ownership. Stock splits do not change any asset, liability, or shareholders' equity balances of a corporation. No journal entry is needed for stock splits.
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STOCK SPLITS AND SPECIAL DIVIDENDS
- Front Matter
- Body Matter
- Back Matter