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On January 1, Brunhilde Corporation had 240,000 common shares issued. On March 17, the company declared a 5% stock dividend to be distributed on March 30. The market value of the shares was $9 on March 17 and $12 on March 30.
-The entry to record the transaction of March 30 would include a
A)credit to Cash for $108,000.
B)debit to Common Stock Dividends Distributable for $108,000.
C)credit to Retained Earnings for $144,000.
D)debit to Stock Dividends for $108,000.

Question

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On January 1, Brunhilde Corporation had 240,000 common shares issued. On March 17, the company declared a 5% stock dividend to be distributed on March 30. The market value of the shares was $9 on March 17 and $12 on March 30.
-The entry to record the transaction of March 30 would include a
A)credit to Cash for $108,000.
B)debit to Common Stock Dividends Distributable for $108,000.
C)credit to Retained Earnings for $144,000.
D)debit to Stock Dividends for $108,000.

Quizplus · Accepted Answer

The entry to record the distribution of a stock dividend involves debiting Common Stock Dividends Distributable, which was credited when the dividend was declared. The amount is calculated as 5% of 240,000 shares multiplied by the par value of the stock.

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