Question - Dynasty Corporation had stockholders' equity on January 1 as follows: Common Stock, $1 par value, 1,000,000 shares authorized, 400,000 shares issued; Paid-in Capital in Excess of Par Value, Common Stock, $800,000; Retained Earnings, $3,600,000. Prepare journal entry to record the following transaction related to a stock dividend:
Mar. 15 The board of directors declared a 1% stock dividend to stockholders of record on March 1. The stock was trading at $7 per share prior to the dividend. (Hint: Use the liability account "Stock Dividend Distributable" for the par value of the stock dividend on this date as the stock dividend is not payable until a later date).