Response to the following problem:
Hunter Racing Motors is authorized to issue 500,000 shares of $1 par common stock. The company issued 80,000 shares at $4 per share, and all 80,000 shares are outstanding. When the market price of common stock was $5 per share, Hunter distributed a 10% stock dividend. Later, Hunter declared and paid a $0.50 per share cash dividend.
Required:
1. Journalize the distribution of the stock dividend.
2. Journalize both the declaration and the payment of the cash dividend.