Bettle Company has 500,000 shares authorized and 100,000 shares issued and outstanding of $4 par value common stock.The current market price of the stock is $25 per share.On May 1,2X13,the company declared and issued a 5% stock dividend.What journal entry would the company make on May 1,2X13?

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A stock dividend involves distributing additional shares of stock to current shareholders, typically in proportion to their current holdings. A 5% stock dividend means that shareholders will receive an additional 5% of their current shares.

In this scenario, Bettle Company has 100,000 shares issued and outstanding. A 5% stock dividend would result in an additional 5,000 shares being issued and outstanding (5% of 100,000).

When a stock dividend is declared, the company transfers a portion of retained earnings to its common stock and additional paid-in capital accounts. The entry should reflect the fair market value of the additional shares being issued. In this case, the market price is $25 per share, so the total value of the 5,000 additional shares is $125,000 (5,000 shares x $25 per share).

The entry to record the stock dividend would be:
Retained Earnings                $125,000
  Common Stock                           $20,000
  Additional Paid-in Capital        $105,000
      (To record a 5% stock dividend)

Bettle Company Has 500,000 Shares Authorized and 100,000 Shares Issued Retained Earnings 20,000 Common Stock 20,000\begin{array}{lcc}\text { Retained Earnings } & 20,000 & \\\quad \text { Common Stock } & & 20,000 \\\end{array} Retained Earnings Common Stock ​20,000​20,000​

Bettle Company Has 500,000 Shares Authorized and 100,000 Shares Issued $\begin{array}{lcc}\text { Retained Earnings } & 20,000 & \\\quad \text { Common Stock } & & 20,000 \\\end{array}$