ABC Declared a Property Dividend $\begin{array}{|l|l|l|}\hline \text { Retained earnings } & 70,000 & \\\hline \text { Property dividends payable } & & 70,000 \\\hline\end{array}$

ABC declared a property dividend. The dividend consisted of 10,000 common shares of its investment in XYZ Company. The shares had originally been purchased at $4 per share and had a $1 par. The value of the shares on the declaration date is $7 per share. What is the first entry that should be recorded related to this dividend?

A) $\begin{array}{|l|l|l|}\hline \text { Retained earnings } & 70,000 & \\\hline \text { Property dividends payable } & & 70,000 \\\hline\end{array}$
B) $\begin{array}{|l|l|l|}\hline \text { Retained earnings } & 70,000 & \\\hline \text { Property dividends payable } & & 40,000 \\\hline \text { Gain } & & 30,000 \\\hline\end{array}$
C) $\begin{array}{|l|l|l|}\hline \text { Investment in XYZ } & 30,000 & \\\hline \text { Retained earnings } & & 30,000 \\\hline\end{array}$
D) $\begin{array}{|l|l|l|}\hline \text { Investment in XYZ } & 30,000 & \\\hline \text { Gain on investment } & & 30,000 \\\hline\end{array}$

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