2. Answer the following questions.
2.1 On January 1, 2021, Dylan, Inc., declared a 10% ordinary share dividend when the fair value of the ordinary shares was $20 per share.
Instructions
Prepare journal entry to record dividend declaration.
2.2 Melvern’s Corporation has an investment in 5,000 shares of Wallace Company ordinary shares with a cost of $218,000. These shares are used in a property dividend to shareholders of Melvern’s. The property dividend is declared on May 25 and scheduled to be distributed on July 31 to shareholders of record on June 15. The market value per Wallace share is $63 on May 25, $66 on June 15, and $68 on July 31.
Instructions
Prepare journal entries to record property dividend declared and distributed.