The Frederick Company has 100,000 shares of $5 par common stock outstanding. Management PAYS (not declares) a 10% stock dividend. The market value of a share of common stock was $32 immediately prior to the stock dividend declaration. The journal entry is:
Question 4 options:
Debit retained earnings $320,000; credit stock dividend distributable $10,000; credit paid in capital in excess of par $310,000.
Debit retained earnings $320,000; credit stock dividend distributable $50,000; credit paid in capital in excess of par $270,000.
Debit stock dividends distributable $320,000; credit common stock $320,000.
Debit stock dividends distributable $50,000; credit common stock $50,000.