Tan Company had these transactions pertaining to stock investments: Feb. 1 Purch

Question

Tan Company had these transactions pertaining to stock investments:

Feb. 1 Purchased 3,000 shares of Norton Company (10%) for $49,800 cash plus brokerage fees of $1,200.
June 1 Received cash dividends of $2 per share on Norton stock.
Oct. 1 Sold 1,200 shares of Norton stock for $24,000 less brokerage fees of $600.

The entry to record the sale of the stock would include a

debit to Stock Investments for $20,400.

debit to Cash for $24,000.

credit to Gain on Sale of Stock Investments for $1,200.

credit to Gain on Sale of Stock Investments for $3,000.

Explanation / Answer

credit to Gain on Sale of Stock Investments for $1,200.

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