Watts Corporation has 40,000 shares of $10 par value common stock outstanding and retained earnings of $820,000. The company declares a 100% stock dividend. The market price at the declaration is $17 per share.

a. Prepare the general journal entry for the stock dividend.

b. Assume that the company splits its stock two shares for one share and reduces the par value from $10 to $5 rather than declaring a 100% stock dividend. How does the accounting for the stock split differ from the accounting for the 100% stock dividend?