Question
Cole Corporation has 100,000 shares of common stock outstanding. The corporation also owns 100,000 shares of William Company common stock purchased 5 years ago at
Cole Corporation has 100,000 shares of common stock outstanding. The corporation also owns 100,000 shares of William Company common stock purchased 5 years ago at $10 per share. Cole decided to distribute the William Company stock as a property dividend on the current basis of one share of William stock from each share of Cole stock owned. The william stock has a current market vaule of $25p per share and has been accounted for using the cost method since the date of acquisition.
Prepare the journal entries Cole Corporation would make for the declaration and payment of the dividend.
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