Pason Systems Inc. is a listedcompany at Toronto Stock Exchange with 50,000 common shares outstanding, and it declared a property dividend on April 1, 2020 to its common shareholders. Each common shareholder was to receive one share ofShopify Inc.for every 10 shares outstanding.Pasonhad 8,000 shares ofShopify, and had purchased them in 2015 for $68,400. The shares are accounted for using the FV-OCI model. The accumulated other comprehensive income reported at December 31, 2019 is $22350, and relates only to these shares ofShopify. The fair value of theShopifyshares was $16 per share on April 1, 2020. The Shopify shares were distributed as property dividend on April 21 when their market price was $18.50 per share. TheShopifyshares remained at a fair value of $18.50 until year end of 2020.

On dividend declaration date,Pason shouldaccount for the fair value adjustment to the securities used as dividends as:

a.

Increase their carrying value and net income by $37,250

b.

Increase their carrying value and other comprehensive income by $23,281.

c.

Increase their carrying value and net income by $23,281.

d.

Increase their carrying value and other comprehensive income by $37,250.