Rick Co. had 31 million shares of $2 par common stock outstanding at January 1, 2018. In October 2018, Rick Co.'s Board of Directors declared and distributed a 2% common stock dividend when the market value of its common stock was $65 per share. In recording this transaction, Rick would:

Multiple Choice

• Credit paid-in capitalexcess of par for $40.30 million.

• Credit common stock for $40.30 million.

• None of these answer choices are correct.

• Debit retained earnings for $40.30 million.