when the company distributes the stock dividend it can make the journal entry 
large stock dividends occur when the new shares issued are more than 25 of the value of the total shares outstanding before the dividend in this case the journal entry transfers the par value of the issued shares from retained earnings to paid in capital if company x declares a 30 stock dividend instead of 10 the value assigned to the dividend would be the par value of 1 per share as it is considered a large stock dividend this would make the following journal entry 150 000 calculated by multiplying 500 000 x 30 x 1 using the par value instead of the market price 