Answer:
b. retained earnings will be reduced by $8000
Step-by-step explanation:
The journal entries are as follows:
Retained earning A/c Dr $8,000
To Dividend payable A/c $8,000
(Being the dividend is declared)
Dividend payable A/c Dr $8,000
To Cash A/c $8,000
(Being the dividend is paid in cash)
So at the time of dividend paid, the retained earnings got reduced by $8,000