Eastline Corporation had 11,500 shares of $5 par value common stock outstanding when the board of directors declared a stock dividend of 3795 shares. At the time of the stock dividend, the market value per share was $15. The entry to record this dividend is:
A. Debit Retained Earnings $56,925; credit Common Stock Dividend Distributable $18,975; credit Paid-In Capital in Excess of Par Value, Common Stock $37,950.
B. Debit Retained Earnings $56,925; credit Common Stock Dividend Distributable $56,925.
C. Debit Retained Earnings $18,975; credit Common Stock Dividend Distributable $18,975.
D. Debit Common Stock Dividend Distributable $56,925; credit Retained Earnings $56,925.
E. No entry is needed.
Answer: C
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