Answer:
a. debit to Stock Dividends for $52,000
Explanation:
The journal entry for March 17 is shown below:
Stock Dividends Dr $52,000
To Common Stock Distributable $40,000
To Paid-in Capital in Excess of Par Value, Common $12,000
(Being excess amount is transferred to the paid in capital)
The computation of dividend which is directed to the shareholders is shown below:
= Number of shares × rate of dividend × par value of a share
= 40,000 shares × 10% × $10
= $40,000
The excess amount
= Number of shares × rate of dividend × (Market value of a share - par value of the share)
= 40,000 shares × 10% × ($13 - $10)
= $12,000
And, the total amount transferred to the Stock Dividends account which equals to
= $40,000 + $12,000
= $52,000
