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Blue Inc. owns shares of Kingbird Corporation stock. At December 31, 2017, the securities were carried in Blues accounting records at their cost of $779,000,
Blue Inc. owns shares of Kingbird Corporation stock. At December 31, 2017, the securities were carried in Blues accounting records at their cost of $779,000, which equals their fair value. On September 21, 2018, when the fair value of the securities was $1,193,000, Blue declared a property dividend whereby the Kingbird securities are to be distributed on October 23, 2018, to stockholders of record on October 8, 2018. Prepare all journal entries necessary on those three dates.
Date Account Titles and Explanation Debit Credit Sep. 21 Retained Earnings 1193000 Property Dividends Payable 1193000 (To record gain or loss) Equity Investments 414000 Unrealized Holding Gain or Loss Income 414000 (To record property dividend) Oct. 8 Property Dividends Payable 1193000 Oct. 23Step by Step Solution
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