Dan Druff Shampoo has 1,000,000 shares of common stock authorized with a par of $1 per share, of which 500,000 shares are outstanding. When the market value was $9 per share, Druff issued a stock dividend by which for each ten shares held, one share was issued as a stock dividend. The par per share did not change. What entry did Druff record for this transaction?
A.
| Paid-in capital-excess of par | 450,000 | |
| Common stock | 50,000 | |
| Retained earnings | 400,000 |
B.
| Retained earnings | 50,000 | |
| Common stock | 50,000 |
C.
| Paid-in capital-excess of par | 50,000 | |
| Common stock | 50,000 |
D.
| Retained earnings | 450,000 | |
| Common stock | 50,000 | |
| Paid-in capital-excess of par | 400,000 |
Answer: D
Business
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