The1 - for the difference between the par(or stated value...

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The $1,000,000 value of the dividend is determined by multiplying the 50,000 shares to be issued  (10%  ×  500,000 outstanding shares) by $20 (market value of stock). The entry to record the  declaration of the dividend decreases (debits) retained earnings for the $1,000,000 market value of  the shares to be issued, increases (credits) common stock dividend distributable for the $150,000  par value of the shares to be issued ($3  ×  50,000), and increases (credits) additional paid-in-capital 
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Unformatted text preview: for the difference between the par (or stated value) and the market value of $850,000 ($50,000 × ($20 – $3)). General Journal Date Account Title and Description Ref. Debit Credit 20X0 May 20 Retained Earnings ((10% × 500,000 shares) × $20 1,000,000 Common Stock Dividend Distributable (50,000 shares to be issued × $ 3 par) 150,000 Additional Paid-in-Capital 850,000 Authorize 10% stock dividend...
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