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A Corporation Had 10,000 Shares of $10 Par Value Common

Question 2

Multiple Choice

A corporation had 10,000 shares of $10 par value common stock outstanding.The board of directors declared and issued a 10% stock dividend.The market value of the stock was $20 per share.What is the journal entry to record this stock dividend?


A) Debit Retained Earnings and credit Common Stock for $20,000.
B) Debit Retained Earnings and credit Common Stock for $10,000.
C) Debit Retained Earnings for $20,000,credit Common Stock for $10,000,and credit Additional Paid-in Capital for $10,000.
D) No entry is made to record the stock dividend.

Correct Answer:

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