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. No entry will be made for this transaction.
B. Retained Earnings will decrease by $2,400,000.
C. Contributed capital will increase by $500,000.
D. Dividends payable will increase by $500,000.
Answer: A
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