On December 1, 2014, Arbor Company Had 20,000 Shares of $1

question 43

Multiple Choice

On December 1, 2014, Arbor Company had 20,000 shares of $1 par value common stock issued and outstanding. The next day they distributed a 50% stock dividend. The market value of the stock on that date was $9 per share. Please provide the journal entry for the transaction. Which of the following is the correct journal entry to record this transaction?

• A) Debit Retained earnings $90,000 and credit Cash $90,000.
• B) Debit Retained earnings $90,000, credit Common stock $10,000 and credit Paid-in capital $80,000.
• C) Debit Common stock $10,000 and credit Retained earnings $10,000.
• D) Debit Retained earnings $10,000 and credit Common stock $10,000.

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Definitions:

Hedged Item

A recognized asset or liability, unrecognized firm commitment, or highly probable forecast transaction in a hedging relationship.

Hedge Effectiveness

The degree to which a hedge transaction reduces the risk of fluctuations in the cash flows or value of an underlying exposure.

Hedge Effectiveness

A measure of how well a hedge transaction reduces the risk of the exposure that the hedge was intended to protect against.

Economic Relationship

Refers to the interactions between different economic variables or entities, such as the connection between supply and demand or investment and economic growth.