Athleetz, Inc., [AI] reported 2,000,000 no par common shares and 1,000,000 no par, $0.90 preferred shares authorized, on January 1, 2018. On the same date, 300,000 common shares [contributed capital $3,600,000] and 175,000 preferred shares [contributed capital $3,500,000] were outstanding.

[28] For This Question Only, assume that the company declared a 8% stock dividend on February 1, 2018, when the unadjusted market price of the common shares was $12.15 each, prior to this dividend declaration. What entry, if any, should AI make to record this transaction on that date?

a.

No Journal Entry required for this transaction. Only a Proforma Entry should be made.

b.

DEBIT-Common Stock Dividends [$270,000]; CREDIT-Common Stock Dividend Distributable [$270,000].

c.

DEBIT-Retained Earnings [$337,500]; CREDIT-Common Stock Dividend Distributable [$337,500].

d.

DEBIT-Common Stock Dividend [$364,500]; CREDIT-Common Stock Capital [$270,000]; CREDIT-Contributed Surplus - Stock Dividends [$94,500].

e.

DEBIT-Common Stock Dividend [$270,000]; CREDIT-Common Stock Capital [$270,000].