On August 31, a corporation has the following financial data:

Common stock issued & outstanding 200,000 shares

Par value of common stock $5 per share

Market price of common stock $40 per share

On August 31, the corporation declares 10% stock dividend on common stock. The stock dividends are distributed on September 30.

Prepare any necessary journal entries on August 31.

Prepare any necessary journal entries on September 30.