Kitch Corporation has 50,000 shares of \(\$ 5\) par value common stock outstanding and retained earnings of \(\$ 820,000\). The company declares a 100 percent stock dividend. The market price at the declaration date is \(\$ 17\) per share.

a. Prepare the journal entries for (1) the declaration of the dividend and (2) the issuance of the dividend.

b. Assume that the company splits its stock 5 -for-1 and reduces the par value from \(\$ 5\) to \(\$ 1\) rather than declaring a 100 percent stock dividend. How does the accounting for the forward stock split differ from the accounting for the 100 percent stock dividend?