Landess Corporation Currently Has 120,000 Shares Outstanding of $1 Par

question 70

Multiple Choice

Landess Corporation currently has 120,000 shares outstanding of $1 par value common stock. The stock was originally issued for $12 per share. On March 15, the board of directors declares a 10% stock dividend when the stock is selling for $16 per share. Which of the following is the correct journal entry to record this transaction?

• A) Debit Common stock $12,000, debit Paid-in capital $180,000 and credit Retained earnings $192,000.
• B) Debit Retained earnings $192,000 and credit Common stock $192,000.
• C) Debit Retained earnings $192,000, credit Common stock $12,000 and credit Paid-in capital $180,000.
• D) Debit Paid-in capital $192,000 and credit Retained earnings $192,000.

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