Pillsbury Company Declares and Distributes a 30% Common Stock Dividend

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

A) debit Retained Earnings $180,000, credit Common Stock $30,000 and credit Paid-in Capital in Excess of Par-Common $150,000
B) debit Retained Earnings $180,000, credit Paid-in Capital in Excess of Par-Common $180,000
C) debit Retained Earnings $180,000 and credit Common Stock $180,000
D) debit Retained Earnings $30,000 and credit Common Stock $30,000