Answer:
Explanation:
Before recording the journal entries first we have to determine the stock dividend which is shown below:
= Number of outstanding shares × stock dividend percentage × market price on April 1
= 3,000,000 shares × 10% × $30
= $9,000,000
The Number of outstanding shares × stock dividend percentage = Issued shares
The journal entries are shown below:
On April 1, 2021
Retained earnings A/c Dr $9,000,000
To Common stock dividends distributable $300,000
To Paid-in capital—Excess of par $8,700,000
(Being the declaration of dividend is recorded and the remaining balance is credited to the Paid-in capital—Excess of par)
On June 1, 2021
Common stock dividends distributable A/c Dr $300,000
To Common stock $300,000
(Being distribution of the stock dividend is recorded)
