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National Corporation had 40 million shares of $2 par common stock outstanding at January 1, 2022. In August 2022, National's Board of Directors declared and

National Corporation had 40 million shares of $2 par common stock outstanding at January 1, 2022. In August 2022, National's Board of Directors declared and distributed a 2% common stock dividend when the market value of its common stock was $54 per share. In recording this transaction, National would:

Debit retained earnings for $43.20 million.

None of these answer choices are correct.

Credit paid-in capitalexcess of par for $43.20 million.

Credit common stock for $43.20 million.

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