Dividend in Specie Accounting Entries

I would like to check the Accounting Entries for a Dividend In Specie

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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

 

 

 

 

 

 

 

Replies (6)

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By johngroganjga
12th Nov 2017 09:51

What is your last entry all about?

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By LV-426
12th Nov 2017 10:09

Its the share for share transfer entry

There are now 673 shares in the trading company, all owned by the holding company after the share for share transfer and 673 shares in the holding company (held by the same shareholders that held the trading company shares prior to the share for share transfer)

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Replying to LV-426:
RLI
By lionofludesch
12th Nov 2017 10:49

So who paid the £673 dividend ?

Received by the holding company, paid by whom ?

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By LV-426
12th Nov 2017 11:28

The (£673) is to reflect the share capital. Not sure where the debit goes. Does it net off against the in specie dividend of £140,000 or does it go to another nominal account
It has not been paid by anyone, it is the share for share transaction

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Replying to LV-426:
By johngroganjga
12th Nov 2017 11:50

The debit goes to investment in subsidiary - with respect, obviously.

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By LV-426
12th Nov 2017 11:53

So ok with the other entries

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