Stock Dividends Litt Corporation has 72,000 shares of $8 par value common stock outstanding. At year-end, the company declares a five percent stock dividend. The market price of the stock on the declaration date is $20 per share. Three weeks later, the company issues the shares of stock to stockholders.

a. Prepare the journal entry for the declaration of the stock dividend. b. Prepare the journal entry for the issuance of the stock dividend. c. Assume that the company declared a 50 percent stock dividend rather than a five percent stock dividend. Prepare the journal entries for (1) the declaration of the stock dividend and (2) the issuance of the stock dividend.

General Journal
Ref.	Description	Debit	Credit
a.	CashCommon stockPaid-in capital in excess of par valueStock dividend distributableStock dividends
	CashCommon stockPaid-in capital in excess of par valueStock dividend distributableStock dividends
	Paid-in capital in excess of par value
	To record declaration of stock dividend.
b.	CashCommon stockPaid-in capital in excess of par valueStock dividend distributableStock dividends
	CashCommon stockPaid-in capital in excess of par valueStock dividend distributableStock dividends
	Issued common stock for stock dividend.
c. (1)	CashCommon stockPaid-in capital in excess of par valueStock dividend distributableStock dividends
	CashCommon stockPaid-in capital in excess of par valueStock dividend distributableStock dividends
	To record declaration of stock dividend.
c. (2)	CashCommon stockPaid-in capital in excess of par valueStock dividend distributableStock dividends
	CashCommon stockPaid-in capital in excess of par valueStock dividend distributableStock dividends
	Issued common stock for stock dividend.