Question

The entry to record the declaration of a stock dividend would include
A. a credit to Retained Earnings.
B. a credit to Cash.
C. a credit to Common Stock.
D. None of the above

Answer 1

a debit to Stock Dividends.

 

The entry would be Stock Dividends debit; Stock Dividends Distributable credit; and Paid-In Capital in Excess of Par--Common Stock credit.

so Non of the above

Answer 2

The correct answer to your question is:

Debit Retained Earnings (market value × number of shares); credit Common Stock Dividend Distributable (number of shares × par value); credit Paid-In Capital in Excess of Par Stock Dividend (market value – par value) × number of shares