Sandhill Inc. owns shares of Teal Corporation stock. At December 31, 2020, the securities were carried in Sandhill's accounting records at their cost of $916,000, which equals their fair value. On September 21, 2021, when the fair value of the securities was $974,000, Sandhill declared a property dividend whereby the Teal 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 (To record gain or loss) (To record property dividend) Debit ][U] Credit

Sandhill Inc. owns shares of Teal Corporation stock. At December 31, 2020, the securities were carried in Sandhill's accounting records at their cost of $916,000, which equals their fair value. On September 21, 2021, when the fair value of the securities was $974,000, Sandhill declared a property dividend whereby the Teal 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 (To record gain or loss) (To record property dividend) Debit ][U] Credit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

Question

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Sandhill Inc. owns shares of Teal Corporation stock. At December 31, 2020, the securities were carried in Sandhill's accounting records
at their cost of $916,000, which equals their fair value. On September 21, 2021, when the fair value of the securities was $974,000,
Sandhill declared a property dividend whereby the Teal 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 0 for the amounts.)
Date
+
♦
Account Titles and Explanation
(To record gain or loss)
(To record property dividend)
Debit
Credit

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