The entry to record the distribution of a stock dividend includes a debit to Common Stock Dividend Distributable.

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When a company distributes a stock dividend, it is creating new shares of common stock to distribute to its shareholders. The entry to record this distribution includes a debit to Common Stock Dividend Distributable, which represents the total value of the new shares to be distributed to shareholders. This is then balanced by a credit to both Common Stock and retained earnings, reflecting the transfer of value from retained earnings to common stock.

The Entry to Record the Distribution of a Stock Dividend