Belkin Incorporated has 106,000 shares of $$ \$ 3 $$ par value common stock outstanding. Belkin declares a $$ 46 \% $$ stock dividend on Marc when the stock's market value is $$ \$ 78 $$ per share. Prepare the journal entry for declaration of the stock dividend.

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**Step 1. Calculate the number of new shares issued:**

$$
\text{New Shares} = 106,\!000 \times 0.46 = 48,\!760
$$

**Step 2. Compute the total market value of the additional shares:**

$$
\text{Total Market Value} = 48,\!760 \times \$78 = \$3,\!803,\!280
$$

**Step 3. Compute the total par value of the new shares:**

$$
\text{Total Par Value} = 48,\!760 \times \$3 = \$146,\!280
$$

**Step 4. Determine the additional paid-in capital (APIC):**

$$
\text{APIC} = \$3,\!803,\!280 - \$146,\!280 = \$3,\!657,\!000
$$

**Step 5. Journal Entry for Declaration of the Stock Dividend:**

$$
\begin{array}{rcl}
\text{Debit: Retained Earnings} & \quad \$3,\!803,\!280 \quad & \text{(to record the total market value of the dividend)} \
\text{Credit: Common Stock Dividend Distributable} & \quad \$146,\!280 \quad & \text{(to record the par value of the new shares)} \
\text{Credit: Additional Paid-in Capital} & \quad \$3,\!657,\!000 \quad & \text{(to record the excess over par)} \
\end{array}
$$
**Journal Entry for Declaration of the Stock Dividend:** - **Debit:** Retained Earnings \$3,803,280 - **Credit:** Common Stock Dividend Distributable \$146,280 - **Credit:** Additional Paid-in Capital \$3,657,000

Belkin Incorporated has 106,000 shares of \( \$ 3 \) par value common stock outstanding. Belkin declares a \( 46 \% \) stock dividend on Marc when the stock's market value is \( \$ 78 \) per share. Prepare the journal entry for declaration of the stock dividend.

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