Pickens Corporation declares and issues a 10% stock dividend. On the date of declaration, the stock is selling for $30 per share. Assuming that there were 50,000 shares previously outstanding, with a $10 par value, prepare the journal entry on the date of declaration to record Pickens’s stock dividend.
Prepare journal entry to record the given transaction.
Stock dividends:
Stock dividends are the number of shares issued by a company to the existing shareholders in a proportion to the number of shares owned by each shareholder, based on a stock dividend percentage.
Prepare journal entry to record the given transaction.
Date | Account Titles and explanation | Debit ($) | Credit ($) |
 | Retained earnings | 150,000 |  |
 |     Common stock to be distributed (2) |  | 50,000 |
 |
     Additional paid-in capital from stock      dividend |  | 100,000 |
 | ( To record declaration of stock dividend) |  |  |
(Table 2)
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