Stock Dividend Journal Entry
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A 35% stock dividend was declared on October 2 by the board of directors of a corporation to shareholders of record on October 20 payable on November 10. The closing market price of the stock on October 2 was $18. The corporation currently has the following items on its Stockholder's Equity section (all dollar amounts):
Common Stock ($2 Stated value) - 2,000,000
Paid in Capital in excess of par - 3,000,000
Retained Earnings - 4,000,000
Total Stockholder's Equity - 9,000,000
Which journal entry would be recorded on the declaration date of a stock dividend?
A.
Retained Earnings 700,000
Paid in Captial in excess of stated value 700,000
B.
Retained Earnings - 700,000
Common Stock Dividends Distributable - 700,000
C.
Retained Earnings - 3,600,000
Common Stock - 3,600,000
D.
Common Stock Dividends Distributable - 700,000
Paid in Captial in excess of stated value - 700,000
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Solution Summary
The stock dividend journal entries are examined. The paid in capital excess of par are given.
Solution Preview
The entry will be option 'B'.
The company is issuing 35% stock dividend. Which means ...
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