On January 1, Hamblin Corporation had 120,000 shares of $10 par value common stock outstanding.On March 17, the company declared a 10% stock dividend to stockholders of record on March 20.The market value of the stock was $13 on March 17.The entry to record the transaction of March 17 would include a
A)credit to Stock Dividends for $36,000.
B)credit to Cash for $156,000.
C)credit to Common Stock Dividends Distributable for $120,000.
D)debit to Common Stock Dividends Distributable for $120,000.

Question

Quizplus · Accepted Answer

The entry to record the stock dividend would include a credit to Common Stock Dividends Distributable for the par value of the additional shares, which is 12,000 shares (10% of 120,000) multiplied by the $10 par value, totaling $120,000.

On January 1, Hamblin Corporation Had 120,000 Shares of $10