The background is the shareholders of a trading company create a holding company in order to protect the property assets. a share for share exchange has been done. The freehold property has been transferred to the holding co by a dividend in specie. The book value of the asset is £91,360 and the dividend in specie value £140,000 (market value).
Entries in the trading company
Freehold Property at Cost (£91,360), Profit (loss) on disposal (£48,640), Dividend Paid £140,000
Entries in the Holding Company
Freehold Property at Cost £140,000, Dividend Received £(140,000)
Share Capital (£673), Dividend Received £673
Are the above entries correct and have i missed anything.
Thanks