On September 1,a Corporation with 50,000 Shares of $5 Par

Multiple Choice

On September 1,a corporation with 50,000 shares of $5 par value common stock and $1,000,000 of retained earnings issues a 2-for-1 stock split.The market price of the stock on that date is $12 per share.Which of the following statements is true concerning this stock split?

A) Contributed capital will increase by $250,000.
B) Retained earnings will decrease by $600,000.
C) Dividends payable will increase by 250,000.
D) No entry will be made for this transaction.