Question: 20. On October 1, Year 3, Sheyer Corp, declared a scrip dividend of $600,000 and issued promissory notes to its stockholders in lieu of cash.

20. On October 1, Year 3, Sheyer Corp, declared a scrip dividend of $600,000 and issued promissory notes to its stockholders in lieu of cash. The corporation has sufficient retained earnings. The notes, which were dated October 1, Year 3, had a maturity date of September 30, Year 4 and a 5% Interest rate. What Is the effect of this scrip dividend on Sheyer's Year 3 retained earnings after all nominal accounts are closed? A. $0 B. $600,000 decrease. C. $607,500 decrease. D. $630,000 decrease

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