Answer:please see answer in explanation column
Explanation:
Journal entry for December 31st , 2018
Date Account Debit Credit
31-Dec Retained Earning $200,000
Common stock distributable $40,000
Addtional Paid in capital in excess of Par $160,000
Calculation:
Total Number of shareS= 100000
Value per share= $2
The market value of stock=$10
declared Stock Dividend =20%
Total Number of new stock to be issued to shareholder
= (100000 X 20%) = 20,000 shares
Retained Earning = 20000 shares x $10 market value= $200,000
Common stock=20000 shares x $2 Par value = $40,000
Paid up capital in excess of Par =20000 shares x ($10 -$2) = $160,000
Journal to record Stock dividend distributed on Jan 20, 2019 to the stockholder on record on Jan 15, 2019)
Date Account Debit Credit
Jan 20 Common stock dividend distributable $40,000
Common stock $40,000
Calculation
Common stock dividend distributable =20000 shares x $2 Par value = $40,000
