On December 15, 20X2, the Board of Directors of Home

On December 15, 20X2, the board of directors of Home Corporation declared a cash dividend, payable on January 8, 20X3, of $2 per share on the 100,000 common shares outstanding. The accounting period ends December 31. Because of this action, on December 15, 20X2, Home Corporation should do which of the following?

A) Make no journal entry because the event had no effect on the corporation's financial position until 20X3.
B) Decrease retained earnings $200,000 and increase liabilities $200,000.
C) Decrease retained earnings $200,000 and increase contributed capital $200,000.
D) Decrease cash $200,000 and decrease retained earnings $200,000.