Global Corporation had 59,000 shares of $20 par value common stock outstanding on July 1. Later that day the board of directors declared a 25% stock dividend when the market value of each share was $29. The entry to record the dividend declaration is

The journal entry for declaration of dividend is shown below:

Retained earning A/c Dr (59,000 shares * $29 per share * 25%) = $427,750

To Common stock dividend distributed (59,000 shares * $20 per share * 25%) = $295,000

To Paid in capital in excess of par value common stock = (59,000 shares * $9 per share * 25%) = $132,750

(Being dividend is declared)