Eastline Corporation had 15,000 shares of $10 par value common stock outstanding when the board of directors declared a stock dividend of 6000 shares. At the time of the stock dividend, the market value per share was $22. The entry to record this dividend is:
A. Debit Retained Earnings $132,000; credit Common Stock Dividend Distributable $132,000.
B. Debit Retained Earnings $60,000; credit Common Stock Dividend Distributable $60,000.
C. Debit Retained Earnings $132,000; credit Common Stock Dividend Distributable $60,000; credit Paid-In Capital in Excess of Par Value, Common Stock $72,000.
D. Debit Common Stock Dividend Distributable $132,000; credit Retained Earnings $132,000.
E. No entry is needed.
Answer: B
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