Sherry, Inc. had 140,000 shares of $5 par value common stock issued and outstanding as of December 15, 2018. The company is authorized to issue 1,000,000 common shares. On December 15, 2018, Sherry declared a 40% stock dividend when the market value for its common stock was $9 per share. The stock was issued on Dec. 30. Prepare the journal entries to record the declaration and distribution of the stock dividend.

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