Juan Inc. has 1,000 common shares issued at $100 and currently trading at $200. The entry to record declaration of a 10% stock dividend is
A) debit Common Stock Dividends Distributable $100,000, credit Retained Earnings $100,000.
B) debit Retained Earnings $100,000, credit Cash $100,000.
C) debit Stock Dividends $20,000, credit Common Stock Dividends Distributable $20,000.
D) debit Common Stock Dividends Distributable $20,000, credit Common Shares $20,000.

Question

Quizplus · Accepted Answer

A 10% stock dividend on 1,000 shares at the current market price of $200 per share equals a total value of $20,000. The correct entry is to debit Stock Dividends and credit Common Stock Dividends Distributable for this amount.

Juan Inc Has 1,000 Common Shares Issued at $100 and Currently