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Question
On September 1, a corporation had 50,000 shares of $5 par value common stock and $1,000,000 of retained earnings. On that date, when the market price of the stock is $15 per share, the corporation issues a 2-for-1 stock split. The general journal entry to record this transaction is:
A.
| Retained Earnings | 750,000 | |
| Common Stock Split Distributable | 750,000 |
B.
| Retained Earnings | 750,000 | |
| Common Stock | 750,000 |
C.
| Retained Earnings | 250,000 | |
| Common Stock | 250,000 |
D.
| Retained Earnings | 250,000 | |
| Stock split payable | 250,000 |
E. No entry is made for this transaction.
Answer
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