Chapter 11, Problem 9QS

To determine

Concept Introduction:

Stock dividends are a distribution of additional shares of its own common stock without any payment. A stock dividend does not reduce assets and equity but instead transfers a portion of equity from retained earnings to contributed capital. Stock dividends are declared to keep the market price of the share affordable, and declare of stock dividends also shows management confidence in the company.

The journal entry for declaration of stock dividends.