Question

On January 1, 2019, Frederick Corporation had 200,000 shares of common stock outstanding with a par value of $5 per share. On March 31, Frederick Corporation authorized a 10% stock dividend when the market value was $18 per share. Use this information to prepare the General Journal entry (without explanation) for March 31. If no entry is required then write "No Entry Required."

Answer 1

Journal entry to record stock dividend authorized (declared)
Date	General Journal	Debit	Credit
31-Mar	Retained earnings (200,000*10%*$18)	$360,000
	Common stock distributable (200,000*10%*$10)		$200,000
	Paid in capital excess of par value, common stock (200,000*10%*$8)		$160,000
	(To record stock dividend declared)
Stock dividend is paid from retained earnings and so declaration of stock dividend would decrease retained earnings for which RE is debited.
Paid in capital excess of par value is credited for increase in balance as capital of company would increase.
Common stock distributable is credited for common stock yet to be issued by company under stock dividend.