Rick Company had 40,000 shares of $3 par value common stock outstanding prior to a 50% common stock dividend declaration and distribution. The market value of the common stock on the declaration date was $10. Which of the following statements correctly describes the effect of recording the common stock dividend?

A. Additional paid-in capital increased $140,000.

B. Retained earnings decreased $60,000.

C. Retained earnings increased $60,000

D. Common Stock increased by $20,000.