A corporation had 18,500 shares of $5 par value common stock outstanding when the board of directors declared a stock dividend of 6,845 shares. At the time of the stock dividend, the market value per share was $19. The entry to record this dividend is:

1) Debit Retained Earnings $130,055; credit Common Stock Dividend Distributable $34,225; credit Paid-In Capital in Excess of Par Value, Common Stock $95,830.

2) Debit Retained Earnings $130,055; credit Common Stock Dividend Distributable $130,055.

3) Debit Common Stock Dividend Distributable $130,055; credit Retained Earnings $130,055.

4) No entry is needed.

5)Debit Retained Earnings $34,225; credit Common Stock Dividend Distributable $34,225.