Effects of Dividends: Baez Company has outstanding 25,000 shares of $10 par common stock. It also has $514,000 of retained earnings. Near the current year-end, the company declares and pays a cash dividend of $1.80 per share and declares and issues a 5% stock dividend. The market price of the stock the day the dividends are declared is $25 per share.

a. What are the journal entries related to the stock dividend. (two transactions)