Answer the following question:

Ottawa Limited had 500,000 common shares outstanding on January 1. The company declared a 3% stock dividend on March 15 to all common shareholders of record as of March 20. The shares were issued on March 31. The market value of the shares was as follows: March 15, $1.50; March 20, $1.48; March 31, $1.52.

Which of the following components would be part of the companys entry on the date of declaration?

a) Credit to common shares of $22,800

b) Credit to retained earnings of $22,500

c) Debit to retained earnings of $22,500

d) Credit to common shares of $22,200

e) Debit to retained earnings of $15,000