Organic Health Co. is an HMO for businesses in the Chicago area. The following account balances appear on the balance sheet of Organic Health Co.: Common stock (300,000 shares authorized), $100 par, $10,000,000; Paid-In Capital in excess of par— common stock, $2,000,000; and Retained earnings, $45,000,000. The board of directors declared a 2% stock dividend when the market price of the stock was $125 a share. Organic Health Co. reported no income or loss for the current year. Journalize the entry to record the declaration of the dividend, capitalizing an amount equal to market value.
