Cash dividends on the $10 par value common stock of Garrett Company were as follows:
1st quarter of 2019.................... $ 800,000
2nd quarter of 2019 ......................900,000
3rd quarter of 2019 ...................1,000,000
4th quarter of 2019 ..................1,100,000
The 4th-quarter cash dividend was declared on December 21, 2019, to shareholders of record on December 31, 2019. Payment of the 4th-quarter cash dividend was made on January 18, 2020.
In addition, Garrett declared a 5% stock dividend on its $10 par value common stock on December 3, 2019, when there were 300,000 shares issued and outstanding and the market value of the common stock was $20 per share.
The shares were issued on December 24, 2019. What was the effect on Garrett’s shareholders’ equity accounts as a result of the preceding transactions?

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Additional Paid-in Retained Common Stock Capital Earnings $3,800,000 dr $3,950,000 dr $4,100,000 dr $3,800,000 dr $0 $0 $0 $150,000 cr $300,000 dr a. $150,000 cr $150,000 cr d. b. c. $300,000 cr