A Company Originally Issued 10,000 Shares of $5 Par Value

question 109

Multiple Choice

A company originally issued 10,000 shares of $5 par value common stock at $7 per share. The board of directors declares a 10% stock dividend when the market price of the stock is $9 a share. Which of the following is included in the entry to record the stock dividend?

• A) Retained earnings is debited for $9,000.
• B) Retained earnings is credited for $9,000.
• C) Retained earnings is debited for $5,000.
• D) Common stock is credited for $9,000.

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