The issuer of a 5% common stock dividend (small stock dividend)to common stockholders should debit stock dividends for an amount equal to the

Question

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When a company issues a small stock dividend (typically less than 20-25% of the existing shares), it is accounted for at the market value of the shares issued. This is because the market value more accurately reflects the cost to the company of issuing additional shares.

The Issuer of a 5% Common Stock Dividend (Small Stock