Dolanski Company Declares and Distributes a 30% Common Stock Dividend

Dolanski Company declares and distributes a 30% common stock dividend when it has 50,000 shares of $10 par common stock outstanding. The market price per share is $30 at the date of declaration. Which journal entry is prepared?

A) debit Retained Earnings $450,000, credit Common Stock $150,000 and credit Paid-in Capital in Excess of Par-Common $300,000
B) debit Retained Earnings $450,000, credit Paid-in Capital in Excess of Par-Common $500,000
C) debit Retained Earnings $450,000 and credit Common Stock $450,000
D) debit Retained Earnings $150,000 and credit Common Stock $150,000