A corporation distributes a 10% common stock dividend on 30,000 shares.
The market value is $24 per share.
The par value is $2 per share.
We have to find the credit that is journalized the moment the distribution is made.
They paid a total amount in dividends that is 10% of the par value of the stock times the number of stocks:
[tex]\begin{gathered} 10\%\cdot2\cdot30000 \\ 0.1\cdot2\cdot30000 \\ 6000 \end{gathered}[/tex]Answer: the credit is $6,000 [Option B]
