The Borio Company had an asset with a $7 book value and a $8 market value; it decided to distribute the asset as a property dividend. Journal entries were made to adjust the property to market value, declare the dividend, and distribute the dividend. Indicate the combined effect on the Net Income and Retained Earnings, respectively:

Select one:

a.

Decrease, Decrease

b.

No Effect, Decrease

c.

No Effect, Increase

d.

Decrease, Increase

e.

Increase, Decrease