Question

Brief Exercise 15-11 Cole Inc. owns shares of Marlin Corporation stock. At December 31, 2020, the securities were carried in Cole's accounting records at their cost of $875,000, which equals their fair value. On September 21, 2021, when the fair value of the securities was $1,200,000, Cole declared a property dividend whereby the Marlin 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. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts, Date Account Titles and Explanation Debit Credit (To record gain or loss) (To record property dividend)

Answer 1

Ans:

Date	Account titles ad explanation	Debit	Credit
December 31, 2020	No Entry required
September 21,2021	Equity investments ($1,200,000 - $875,000)	$ 325,000
	Unrealized gain or loss		$ 325,000
	(To record gain or loss)
	Retained earnings	$1,200,000
	Property dividends payable		$1,200,000
	(to record Property Dividend)
October 23, 2021	Property dividends payable	$1,200,000
	Equity investments in Marlin Corporation		$1,200,000