when a stock dividend is issued the total value of equity remains the same from the investor s and the company s perspectives 
all stock dividends require an accounting journal entry for the company issuing the dividend this entry transfers the value of the issued stock from the retained earnings account to the paid in capital account a stock dividend is considered small if the shares issued are less than 25 of the total value of shares outstanding before the dividend a journal entry for a small stock dividend transfers the market value of the issued shares from retained earnings to paid in capital suppose company x declares a 10 stock dividend on its 500 000 shares of common stock its common stock has a par value of 1 per share and a market price of 5 per share 