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Luna Corp. has 220,000 shares of $6-par common stock outstanding. They have declared a 10% stock...

Luna Corp. has 220,000 shares of $6-par common stock outstanding. They have declared a 10% stock dividend. The current market price of the common stock is $ 14 / (share) . What is the amount that will be credited to Common Stock on the date of declaration? Select one:

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Answer #1
Answer = $ 132,000
$ 132,000 Credited to Common Stock on the declaration
Explanation :
General Journal Debit Credit
Retained Earnings (220,000 shares *10%* $14 ) $ 308,000
             Common Stock (220,000 Shares*10%*$6 ) $ 132,000
             Paid in capital in Excess of Par ($308,000-$132,000) $ 176,000
(To record issuance of 10 % Stock dIvidend )
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