On January 1, Edison Corporation had 1,000,000 shares of $10 par value common stock outstanding. On March 31, the company declared a 20% stock dividend. Market value of the stock was $18/share. As a result of this event,

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A stock dividend does not affect total stockholders' equity, but it does increase the common stock and paid-in capital accounts. The Stock Dividends account increases by the market value of the dividend shares, which is $3,600,000 (200,000 shares x $18). Paid-in Capital in Excess of Par increases by $1,600,000, which is the difference between the market value and par value of the dividend shares (200,000 shares x ($18 - $10)).

On January 1, Edison Corporation Had 1,000,000 Shares of $10