In accordance with restrictive debt covenants, Maynard Company appropriated $20,000 of retained earnings. Which of the following entries would be required to recognize this appropriation?
A.
| Appropriated retained earnings | 20,000 | |
| Cash | 20,000 |
B.
| Retained earnings | 20,000 | |
| Appropriated retained earnings | 20,000 |
C.
| Appropriated retained earnings | 20,000 | |
| Retained earnings | 20,000 |
D. No entry would be required.
Answer: B
Business
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