Hometown Bancshares has $40,000$ shares of $$3$ par value common stock outstanding. Suppose Hometown declares and distributes a $5\%$ stock dividend when the market value of its stock is $$15$ per share.

Journalize Hometown's declaration and distribution of the stock dividend on May $11.$ An explanation is not required.

What was the overall effect of the stock dividend on Hometown's total assets? On total liabilities? On total stockholders' equity?

Joumalize Hometown's declaration and distribution of the stock dividend on May $11.$ An explanation is not required. $($Record debits first, then credits. Exclude explanations from any journal entries.$)$

Journal Entry