Augusta Corporation reported the following information: 35,000 shares of $3 par value common stock authorized, 30,000 shares common stock issued, 10,000 shares treasury stock.
Required:
1. What is the appropriate journal entry to record a 5% stock dividend if the market price of the common stock is $40 per share when the dividend is declared?
2. What is the appropriate journal entry to record a 20% stock dividend if the market price of the common stock is $40 per share when the dividend is declared?
3. How do these transactions affect Augusta's total stockholders' equity?