Odessa Corporation had 20,000 shares of $2 par value common stock outstanding on July 1. On that day, the board of directors declared a 10% stock dividend when the market value of each share was $9. The stock dividend is to be distributed on July 20 to stockholders of record on July 10. The entry to record the issuance of the shares on July 20 is:
A. Debit Retained Earnings $18,000; credit Common Stock $4,000; credit Paid-In Capital in Excess of Par Value, Common Stock $14,000.
B. Debit Retained Earnings $18,000; credit Common Stock $18,000.
C. Debit Common Stock Dividends Distributable $4,000; credit Common Stock $4,000.
D. Debit Common Stock Dividends Distributable $18,000; credit Common Stock $18,000.
E. Debit Retained Earnings $18,000; credit Common Stock Dividends Distributable $4,000; credit Paid-In Capital in Excess of Par Value, Common Stock $14,000.
Answer: C
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