Alpha Co. and Beta Co. are identical in all regards except that during 2018 alpha co borrowed $20,000 at an interest rate of 10%. In contrast, Beta Co. obtained financing by acquiring $20,000 from sale of common stock. Beta Co. agreed to pay $2,000 cash dividend each year. Both companies are in a 30% tax bracket.

A. How much (increase or decrease) would these transactions have on Alpha Co's retained earnings?

B. How much (increase or decrease) would these transactions have on Beta Co's retained earnings?