The issuer of a 100% common stock dividend (large stock dividend)to common stockholders should debit stock dividends for an amount equal to the

Question

Quizplus · Accepted Answer

When a company issues a 100% common stock dividend or a large stock dividend, the accounting entry involves transferring the amount from retained earnings to the common stock account. This increases the number of outstanding shares of the company but does not change the overall value of equity. Since this is a stock dividend, the par value of the shares issued should be debited in the stock dividends account. Therefore, the correct choice is B – Par value of the shares issued.

The Issuer of a 100% Common Stock Dividend (Large Stock