(Answered) Question - spaceco declared and distributed a 20 stock

Accounting

Question - SpaceCo declared and distributed a 20% stock dividend on 5 million, $1 par value, common shares. The market value on the declaration date was $30 per share.

Required:

1) Show the entry for this dividend and

2) Show the entry necessary if this were instead a 100% stock dividend.

3) Does total OE change as a result of these entries?

4) Does any particular shareholder own a higher % of shares immediately following the dividend?

5) Why is this called "capitalizing" retained earnings?

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