Homework Answers
Stock dividend or decrease in retained earnings =10,000×$12×30% = $36,000
Common stock = 10,000×$10×30% = $30,000
Paid in capital in excess of par = 36,000-30,000 = $6,000
Debit retained earnings $36,000; credit common stock $30,000; credit paid in capital in excess of par value $6,000.
Hence, the correct answer is option b.
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