Global Corporation had 50,000 shares of $20 par value common stock outstanding on July 1. Later that day the board of directors declared a 10% stock dividend when the market value of each share was $27. The entry to record the dividend declaration is:

Please see answer below

Explanation:

The entry to record the dividend declaration is as shown below;

Retained earning A/c Dr (50,000 shares × $27 per share × 10%) = $135,000

To common stock dividend distributed ( 50,000 shares × $20 per share × 10%) = $100,000

To paid-in-capital in excess of par value common stock (50,000 shares × $7 per share × 10%) = $35,000

(Being dividend that is declared)

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