A company issues a stock dividend of 1,000 shares. Par value is $10 per share and market value is $30 per share. Choose the correct account effect:

Question

Quizplus · Accepted Answer

When a company issues 3,000 shares of common stock with a par value of $10 per share for a total of $30,000, the Common Stock account will increase by the number of shares issued multiplied by the par value ($10 × 3,000 = $30,000). Retained Earnings, Capital Contributed in Excess of Par, and Cash are not affected by the issuance of common stock at par value.

A Company Issues a Stock Dividend of 1,000 Shares