Thornton, Inc., is authorized to issue 100,000 shares of \(\$ 1\)-par common stock. The company issued 50,000 shares at \(\$ 4\) per share, and all 50,000 shares are outstanding. When the retained earnings balance was \(\$ 150,000\), Thornton declared and distributed a 50 -percent stock dividend. Later, Thornton declared and paid a \(\$ 0.20\) per share cash dividend.

\section*{Required}

1. Journalize the declaration and distribution of the stock dividend.

2. Journalize the declaration and payment of the cash dividend.

3. Prepare the stockholders' equity section of the balance sheet after both dividends.