DORA Company declared and distributed a 10% stock dividend on 20,000 shares of issued and

outstanding $5 par value common stock. The market price per share on the declaration date was $9

and was $10 on the distribution date. Which of the following correctly describes the accounting for the declaration and distribution of the stock dividend?

A. Retained earnings decreased $20,000.

B. Capital in excess of par increased $10,000.

C. Common stock increased $18,000.

D. Retained earnings decreased $18,000.