On January 1, Sway Corporation had 60,000 shares of $10 par value common stock outstanding.On March 17, the company declared a 15% stock dividend to stockholders of record on March 20.Market value of the stock was $13 on March 17.The stock was distributed on March 30.The entry to record the transaction of March 30 would include a

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A stock dividend means that additional shares are distributed to stockholders instead of cash. In this case, the company declared a 15% stock dividend, which means that for every 100 shares of common stock held, the stockholder would receive an additional 15 shares.

The first important date in this transaction is March 20, which is the date of record. This means that stockholders who held shares on this date are entitled to receive the stock dividend.

The market value of the stock on March 17 is irrelevant to the journal entry. It is only useful information to give an idea of the company's stock price at the time of the dividend declaration.

On March 30, the stock dividend is distributed. This means that additional shares are issued to the stockholders who are entitled to receive the dividend. Since the company had 60,000 shares outstanding before the dividend and a 15% stock dividend was declared, the company will issue an additional 9,000 shares (15% of 60,000).

The entry to record the stock dividend distribution should include a debit to Common Stock Dividends Distributable, which is a temporary equity account that represents the additional shares to be issued. The credit entry will be to Common Stock, which will increase the number of shares outstanding. This entry does not affect the company's cash balance, so there should be no entry to Cash or any other asset account.

The amount to be recorded for the stock dividend is the par value of the additional shares to be issued. Since the stock has a par value of $10, the total par value of the additional shares is $90,000 (9,000 shares x $10 par value per share). This is the amount that should be debited to Common Stock Dividends Distributable.

Therefore, the correct answer is B, debit to Common Stock Dividends Distributable for $90,000.

On January 1, Sway Corporation Had 60,000 Shares of $10