Question $33$

The Carbon Free Company declared a $$3,500$ cash dividend on March $1,2012$ payable on April $2,2012.$ The effect of the March $1$st transaction on the Carbon Free Company would be to

increase the balance in the dividend expense account and increase the balance in the retained earnings account by $$3,500.$

increase the balance in the dividend payable account and increase the balance in the prepaid dividend account by $$3,500.$

decrease the balance in the cash account and decrease the balance in the retained earnings account by $$3,500.$

increase the balance in the dividend expense account and increase the balance in the dividend payable account by $$3,500.$

increase the balance in the dividend payable account and decrease the balance in the retained earnings account by $$3,500.$