A corporation had 80,000 shares of $3 par value common stock outstanding. The board of directors declared and issued a 10% stock dividend. The market value of the stock was $27 per share. What is the journal entry to record this stock dividend?

MC:

• Debit Retained Earnings for $216,000, credit Common Stock for $24,000, and credit Additional Paid-in Capital for $192,000.

• Debit Retained Earnings and credit Cash for $216,000.

• Debit Retained Earnings for $240,000, credit Common Stock for $24,000, and credit Additional Paid-in Capital for $216,000.

• Debit Retained Earnings and credit Common Stock for $216,000.

• Debit Retained Earnings and credit Common Stock for $24,000.