Stock Dividend

Augusta Corporation reported the following information: 35,000 shares of $3 par value common stock authorized, 30,000 shares common stock issued, 10,000 shares treasury stock.

Required:

1. What is the appropriate journal entry to record a 5% stock dividend if the market price of the common stock is $40 per share when the dividend is declared?

	Retained Earnings
	Common Stock
	Additional Paid-In Capital-Common Stock

Feedback

1. Small stock dividends are capitalized using the stock's market value, while large stock dividends are capitalized at the stock's par value.

2. What is the appropriate journal entry to record a 30% stock dividend if the market price of the common stock is $40 per share when the dividend is declared?

	Retained Earnings
	Common Stock