On December 15, 2021, the Board of Directors of ABC Inc. declared a cash dividend, payable on January 8, 2022, of $2 per share on the 100,000 shares of common stock outstanding. The accounting period ends on December 31. As a result of this decision, on December 15, 2021, ABC inc is expected to do which of the following? Options in Question 7:

None of the above

Make no journal entry because the event had no effect on the balance sheet for the year 2021

Decrease retained earnings by $200,000 and increase liabilities by $200,000.

Decrease cash by $200,000 and decrease retained earnings by $200,000.

Decrease retained earnings by $200,000 and increase capital by $200,000.