Happy Holidays, Inc has 110,000 shares of common stock issued and outstanding, with a par value of $0
03 per share. It declared a 17% common stock dividend; market value is $14 per share. Which of the following is the correct journal entry to record the transaction? (Round your answers to the nearest whole dollar.)
A) debit Stock Dividends $261,800 and credit Paid-In Capital in Excess of Par-Common $261,800
B) debit Stock Dividends $261,800, credit Common Stock Dividend Distributable $561, and credit Paid-In Capital in Excess of Par-Common $261,239
C) debit Stock Dividends $261,800 and credit Cash $261,800
D) debit Common Stock Dividend Distributable $561, debit Paid-In Capital in Excess of Par-Common $261,239, and credit Retained Earnings $261,800
B .B)
Stock Dividends = (110,000 x $14 x 17%) = 261,800
Common Stock Dividend Distributable = (110,000 x $0.03 x 17%) = 561
Paid-In Capital in Excess of Par-Common = (110,000 x ($14 - $0.03 ) x 17%) = 261,239
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