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17 May, 01:29

Sage Inc. owns shares of Pronghorn Corporation stock. At December 31, 2020, the securities were carried in Sage's accounting records at their cost of $1,030,000, which equals their fair value. On September 21, 2021, when the fair value of the securities was $1,397,000, Sage declared a property dividend whereby the Pronghorn securities are to be distributed on October 23, 2021, to stockholders of record on October 8, 2021.

Prepare all journal entries necessary on those three dates.

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  1. 17 May, 01:51
    0
    The Journal entry was recorded for Sage Inc, in the explanation section below

    Explanation:

    Journal Entries

    Date Account Title and Debit $ Credit $

    Explanation

    21st Sept-21 Equity Investments

    ($1,397,000 - $1,030,000,) $367,000

    To unrealized holding gain

    or loss $367,000

    21st Sept-21 The retained earnings $1,397,000

    To Property Dividends payable $1,397,000

    08 - Oct-21 No entry

    23 - Oct-21 Property Dividends payable $1,397,000

    To Equity Investments $1,397,000
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