Oct. $31.$ Declared semiannual dividends of $$1\mathrm{.}30$ per share on the preferred stock and $$0\mathrm{.}07$ per share on the common stock $($before the stock dividend$).$ In addition, a $1\%$ common stock dividend was declared on the common stock outstanding. The fair market value of the common stock is estimated at $$50.$

Oct. $31$

Cash Dividends Payable $$

Oct. $31$ Stock Dividends $$

Stock Dividends Distributable not$$

Paid$-$In Capital in Excess of Par$-$Common Stock $$

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On the date of declaration of a cash dividend, it becomes legally binding. How do stock dividends affect stockholders' equity?

Dec. $31.$ Paid the cash dividends and issued the certificates for the common stock dividend.

Dec. $31$ Cash Dividends Payable $$

Dec. $31$ Stock Dividends Distributable $$