# Pronghorn Inc. owns shares of Stellar Corporation stock. At December 31, 2017, the securities...

## Question:

Pronghorn Inc. owns shares of Stellar Corporation stock. At December 31, 2017, the securities were carried in Pronghorn's accounting records at their cost of $845,000, which equals their fair value. On September 21, 2018, when the fair value of the securities was$1,249,000, Pronghorn declared a property dividend whereby the Stellar securities are to be distributed on October 23, 2018, to stockholders of record on October 8, 2018. Prep journal entries necessary on those three dates.

## Dividend:

A share of the earnings of the company, which are distributed as rewards among its shareholders, is known as a dividend. The rates of dividends are managed by the board of directors and get approved by the shareholders with the help of voting.

 Date Account Title and Explanation Debit ($) Credit ($) September 21, 2018 Equity Investment ($1,249,000 -$845,000) $404,000 Unrealized holding gain$404,000 (To record unrealized holding gain) September 21, 2018 Retained earnings $1,249,000 Property dividend payable$1,249,000 (To record property dividend payable) October 8, 2018 No entry October 23, 2018 Property dividend payable $1,249,000 Equity investments$1,249,000 (To record distribution of dividend)