Dolanski Company Declares and Distributes a 30% Common Stock Dividend

Multiple Choice

Dolanski Company declares and distributes a 30% common stock dividend when it has 60,000 shares of $10 par common stock outstanding.The market price per share is $75 at the date of declaration.Which journal entry is prepared?

A) debit Retained Earnings $1,350,000,credit Common Stock $180,000 and credit Paid-in Capital in Excess of Par-Common $1,170,000
B) debit Retained Earnings $1,350,000,credit Paid-in Capital in Excess of Par-Common $500,000
C) debit Retained Earnings $1,350,000 and credit Common Stock $1,350,000
D) debit Retained Earnings $180,000 and credit Common Stock $180,000