Eastline Corporation had 10,000 shares of $10 par value common stock outstanding when the board of directors declared a stock dividend of 3,000 shares. At the time of the stock dividend, the market value per share was $12. The entry to record this dividend is:

A. Debit Retained Earnings $36,000; credit Common Stock Dividend Distributable $36,000.

B. Debit Retained Earnings $36,000; credit Common Stock Dividend Distributable $30,000; credit Paid-In Capital in Excess of Par Value, Common Stock $6,000.

C. Debit Common Stock Dividend Distributable $36,000; credit Retained Earnings $36,000.

D. Debit Retained Earnings $30,000; credit Common Stock Dividend Distributable $30,000.

E. No entry is needed.

Question

Josue Mccormick

Business

5 February, 07:30

Eastline Corporation had 10,000 shares of $10 par value common stock outstanding when the board of directors declared a stock dividend of 3,000 shares. At the time of the stock dividend, the market value per share was $12. The entry to record this dividend is:

A. Debit Retained Earnings $36,000; credit Common Stock Dividend Distributable $36,000.

B. Debit Retained Earnings $36,000; credit Common Stock Dividend Distributable $30,000; credit Paid-In Capital in Excess of Par Value, Common Stock $6,000.

C. Debit Common Stock Dividend Distributable $36,000; credit Retained Earnings $36,000.

D. Debit Retained Earnings $30,000; credit Common Stock Dividend Distributable $30,000.

E. No entry is needed.

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Answers (1)

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Clark Pena · Answer 1

B) Debit Retained Earnings $36,000; credit Common Stock Dividend Distributable $30,000; credit Paid-In Capital in Excess of Par Value, Common Stock $6,000.

Explanation:

The journal entry is as follows:

Account Debit Credit

Retained Earnings $36,000

Common Stock Dividend Distributable $30,000

Paid in Capital in Excess of Par Value $6,000