The journal entry to record the declaration of a stock dividend includes
A)a credit to Stock Dividends Distributable.
B)a credit to Stock Dividends Payable.
C)a credit to Dividends Declared.
D)a credit to Cash.

Question

Quizplus · Accepted Answer

A stock dividend involves transferring amounts from retained earnings to paid-in capital, and "Stock Dividends Distributable" is credited to recognize the liability to issue additional shares.

The Journal Entry to Record the Declaration of a Stock