Reference no: EM132753488

Problem 1: The Malone Company has 200,000 shares of $10 par common stock outstanding. Management declares (not pays) a 10% stock dividend. The market value of a share of common stock was $15 immediately prior to the stock dividend declaration. The journal entry is:

Option A) debit stock dividends distributable, $200,000; credit common stock, $200,000.

Option B) debit retained earnings, $300,000; credit stock dividend distributable, $200,000; credit paid in capital in excess of par, $100,000

Option C) debit stock dividends distributable, $150,000; credit common stock, $150,000.

Option D) debit retained earnings, $300,000; credit stock dividend distributable, $100,000; credit paid in capital in excess of par, $200,000.