Superior Company had 50,000 shares of $100 par value common stock outstanding on June 30. On July 1, the board of directors declared a 10% stock dividend when the market value of each share was $108.

The journal entry on July 1 will include:

Select one:

a. A debit to Retained Earnings for $500,000

b. A credit to Paid-in capital in excess of par value $540,000.

c. A credit to Stock Dividend Distributable for $500,000

d. A credit to Stock Dividend Distributable for $540,000