Luther Lumber Corporation has 1,000,000 shares of common stock authorized, of which 550,000 shares are issued and outstanding. The common stock has a $10 par value, a $12 book value, and a $13 market value when the corporation declared a 10% stock dividend. What journal entry is required on that date?

a. None.

b. Retained Earnings 550,000

Dividends Payable 550,000

c. Retained Earnings 660,000

Stock Dividend Distributable 550,000

Paid-in Capital in Excess of Par Value 110,000

d. Retained Earnings 715,000

Stock Dividend Distributable 550,000

Paid-in Capital in Excess of Par Value 165,000