Question: On October 15, 2016, a 5% stock dividend was declared and distributed. The market value of the common stock on this date was $32 per

On October 15, 2016, a 5% stock dividend was declared and distributed. The market value of the common stock on this date was $32 per share. On the date of declaration and payment, the company had 10 million shares of common stock outstanding. The par value of the common shares was $5. The journal entry to record the declaration and distribution of the stock dividend will

D. Decrease retained earnings by $13.5 million
B. Decrease retained earnings by $16 million
A. Decrease retained earnings by $2.5 million
C. Increase common stock by $16 million

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