A Corporation Had 10,000 Shares of $10 Par Value Common

question 2

Multiple Choice

A corporation had 10,000 shares of $10 par value common stock outstanding.The board of directors declared and issued a 10% stock dividend.The market value of the stock was $20 per share.What is the journal entry to record this stock dividend?

• A)Debit Retained Earnings and credit Common Stock for $20,000.
• B)Debit Retained Earnings and credit Common Stock for $10,000.
• C)Debit Retained Earnings for $20,000,credit Common Stock for $10,000,and credit Additional Paid-in Capital for $10,000.
• D)No entry is made to record the stock dividend.