A company would like to issue a 5% stock dividend this year. The company has 15,000 shares of common stock and no preferred stock outstanding. The stock has a par value of $2 and an initial issue value of $12 per share. Currently the stock is trading at $20 per share. I have to record a journal entry for the 5% stock dividend.
So far I have this:
DEBIT - Retained Earnings - 300,000
CREDIT - Common Stock - 1500
CREDIT - Additional Paid in Capital-Common Stock - 298500
Which is not right.. I got turned around somehow and the instructors description isn't helping.. so can someone kindly help point me in the right direction? Thanks!
EDIT - Figured it out..
I forgot to take the # of shares by the % and then multiply that by the current market price per share.