Q8) Vaqil Corp. has 350,000 shares of common stock outstanding. The par value of the stock is $1 per share. During the year, Vaqil declares a 10% stock dividend when the market price of the stock was $16 per share. The journal entry to record the stock dividend is (combining the journal entry at the declaration date with the journal entry at the payment date)

debit Retained Earnings for $350,000 and credit Common Stock for $350,000

debit Retained Earnings for $560,000 and credit Common Stock for $560,000

debit Retained Earnings for $560,000, credit Common Stock for $35,000, and credit Additional Paid-in Capital for $525,000

no journal entry is necessary

Q9) Assume the same scenario as in Question #8, except that now assume Vaqil declares a 50% stock dividend (i.e., instead of 10%, as in #8). The journal entry to record the stock dividend is (combining the journal entry at the declaration date with the journal entry at the payment date)

debit Retained Earnings for $175,000 and credit Common Stock for $175,000

debit Retained Earnings for $2,800,000 and credit Common Stock for $2,800,000

debit Retained Earnings for $2,800,000, credit Common Stock for $175,000, and credit Additional Paid-in Capital for $2,625,000

no journal entry is necessary