Chapter 18, Problem 18.19E

Stock dividend

• LO18–8

The shareholders’ equity of Core Technologies Company on June 30, 2017, included the following:

Common stock, $1 par; authorized, 8 million shares;
issued and outstanding, 3 million shares	$ 3,000,000
Paid-in capital—excess of par	12,000,000
Retained earnings	14,000,000

On April 1, 2018, the board of directors of Core Technologies declared a 10% stock dividend on common shares, to be distributed on June 1. The market price of Core Technologies’ common stock was $30 on April 1, 2018, and $40 on June 1, 2018.

Required:

Prepare the journal entry to record the declaration and distribution of the stock dividend on the declaration date.