Exercise 4, Property Dividends:

a. Assume that on 6/21, Year 6, a corporation declares a property dividend in the form of a held-to-maturity bond investment for shareholders of record on 7/9, Year 6, payable on 8/4, Year 6. On 6/21, Year 6, the investment account shows the book value of the investment at $300,000 and the fair value $340,000.

6/21/Yr 6

6/21/Yr 6

..

7/9/Yr 6

8/4/Yr 6

b. Assume that on 6/21, Year 6, a corporation declares a property dividend in the form of a held-to-maturity bond investment for shareholders of record on 7/9, Year 6, payable on 8/4, Year 6. On 6/21, Year 6, the investment account shows the book value of the investment at $300,000 and the fair value $260,000.

6/21/Yr 6

6/21/Yr 6

..

7/9/Yr 6

8/4/Yr 6