Peter Quitzau Inc. (PQI) owns 200,000 common shares of Margaret Thornton Ltd. (MTL), a private company. PQI distributes its shareholding in MTL to PQI’s shareholders by way of property dividend. Other information follows:
■ PQI exercises significant influence over MTL. It accounts for its investment using the equity method.
■ At dividend declaration date, the cost of the MTL investment was $400,000; the book value $500,000; and the estimated market value $600,000.
■ The dividend was declared on December 15, 2018, and is distributed on December 18, 2018.

Required:

Prepare the required journal entries to record the declaration and payment of the dividend in kind, assuming that PQI prepares its financial statements in accordance with ASPE.