K-Motors Ltd. 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.

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? Your answer must be based on IFRS.

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].