The shareholders' equity of Nature Co. is as shown:

Common stock, $10 par $500,000

Paid in capital in excess of par - common stock. 300,000

Retained Earning 400,000

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1,200,000

Nature Co. is considering the declaration and issuance of a stock dividend at a time where the market price is $40 per share

Assuming the board of directors recommends a 6% stock dividend, prepare: (please show work)

a. the journal entry at the date of declaration

b. the journal entry at the date of issuance

c. shareholders' equity after the issuance