On September 1,Primrose Industries with 100,000 shares of $5 par value common stock and $2,000,000 of Retained Earnings issues a 2-for-1 stock split.The market price of the stock on that date is $24 per share.Which of the following statements is correct concerning this stock split?
A) Contributed capital will increase by $500,000.
B) Retained Earnings will decrease by $2,400,000.
C) Dividends payable will increase by $500,000.
D) No entry will be made for this transaction.
Correct Answer:
Verified
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