The balances of the equity accounts fo the Zap Corporation are presented below:

Common stock, $20 par, 50,000 shares authorized, 20,000 shares issued

And outstanding----------------------------------------------------------$400,000

Premium on common stock----------------------------------------------- 10,000

Retained earnings --------------------------------------------------------- 100,000

REQUIRED: Based on the above information, complete the following:

1. The journal entry for the declaration of a 5% stock dividend when the market value of Zap Corporation is $21 per share.

2. The journal entry for the declaration of a cash dividend of $1.50 per share prior to the stock dividend in part (A).