The subscription account is left open until such time as it is closed by the payments credited. When a dividend is declared the entries are—
Surplus
Dividends payable
Being a dividend of ——%
declared by the board of
directors on————1909
payable————1909.
————
Dividends payable
Subscriptions
Dividend applied to the
payment of subscriptions.
Another provision sometimes met with in the issue of stock to an employe is that in lieu of an increase in salary he shall receive, at the end of the year, a certain amount in stock. He is then permitted to subscribe for a stated amount of stock and to apply the bonus, or added salary, as a payment. The bonus is usually a stated per cent of sales or of net profits. When such a contingency arises the entry is—