Rick Co. had 30 million shares of $1 par common stock outstanding at January 1, 2011. In October, 2011, Rick Co.'s Board of Directors declared and distributed a 1% common stock dividend when the market value of its common stock was $60 per share. In recording this transaction, Rick would:
A. Debit retained earnings for $18 million.
B. Credit paid-in capital - excess of par for $18 million.
C. Credit common stock for $18 million.
D. None of the above is correct.
Answer: A
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