The shareholders equity of a company on June 30, Year 1, included the following:

Common stock, $1 par; authorized, 9 million shares; issued and outstanding, 3 million shares$ 3,000,000Paid-in capitalexcess of par12,000,000Retained earnings12,000,000

On April 1, Year 2, the board of directors of the company declared a 10% stock dividend on common shares, to be distributed on June 1. The market price of the companys common stock was $28 on April 1, Year 2, and $38 on June 1, Year 2.

Required:

Prepare the journal entries to record the declaration and distribution of the stock dividend.

Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.