Ellis Company has 1,000,000 shares of common stock authorized with a par value of $3 per share of which 600,000 shares are outstanding. Ellis authorized a stock dividend when the market value was $8 per share, entitling its stockholders to one additional share for each share held. The par value of the stock was not changed. Assuming the declaration is not recorded separately, what entry, if any, should Ellis make to record distribution of the stock dividend?
A) Retained Earnings........... 4,800,000
Common Stock.............. 1,800,000
Gain on Stock Dividends... 3,000,000
B) Retained Earnings........... 1,800,000
Common Stock.............. 1,800,000
C) Retained Earnings........... 4,800,000
Common Stock.............. 1,800,000
Paid-In Capital from Stock Dividends 3,000,000
D) Memorandum entry noting the number of additional shares issued as a dividend