Stock dividends - These are dividends paid in the form of additional stock of the issuing company to shareholders of record in proportion to their current holdings. A stock dividend does not increase the wealth of the recipient nor does it reduce the net assets of the firm. It is a permanent capitalization of retained earnings to contributed capital.
As there is no change in the amount of the stock that;s why stock dividend does not require any entry to be recorded rather it is shown as note.
