Reference no: EM132889680

Problem - Stock Dividend The shareholders' equity of Raven Company is as shown:

Common stock, $10 par $250,000

Additional paid-in capital on common stock 150,000

Retained earnings 200,000

$600,000

Raven is considering the declaration and issuance of a stock dividend at a time when the market price is $30 per share.

Required -

1. Assuming the board of directors recommends a 6% stock dividend, prepare:

a. the journal entry at the date of declaration

b. the journal entry at the date of issuance

c. shareholders' equity after the issuance

2. Assuming, instead, that a 40% stock dividend is recommended, answer a, b, and c of Requirement 1.