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    Description of journal entry for a stock dividend on common

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    Describe the journal entry for a stock dividend on common stock (which has a par value).

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    https://brainmass.com/business/journal-entries/description-journal-entry-stock-dividend-common-473325

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    Stock Dividend are issued when company wants to retain cash in the business but still want to rewards its shareholders.

    Stock Dividend in literally sense capitalize the 'Retained Earnings'(RE). That means stock dividend amount is deducted from RE and out of this one portion added to Common Stock - par value and the balance is added to 'Additional paid-in capital - par value'.

    Par ...

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    The solution describes the journal entry for a stock dividend on common stock (which has a par value).

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