Stein Company had the following transactions pertaining to its short-term stock

Question

Stein Company had the following transactions pertaining to its short-term stock investments. Stein owns more than 20% of the Pine Company stock and has significant influence in decision-making.
Jan. 1
June 1
Sept. 15
Purchased 50,000 shares of Pine Company stock as an investment for $499,750 cash plus brokerage fees of $250.
Received cash dividends of $0.25 per share on the Pine Company stock investment.
Sold 2,000 shares of the Pine Company stock investment for $220,100 less brokerage fees of $100.
Instructions
Journalize the transactions.

Explanation / Answer

Jan 1 Investment in Pine co ....Dr 499750

Brokerage....Dr 250

To BankA/c 500000

(Being investment done in Pine Co and paid brokerage for the same)

June 1 Cash A/c......Dr 12500(0.25*50000)

To Dividend income 12500

(Being dividend income received in cash)

Sept 15 Bank A/c.....Dr 220000

Brokerage....Dr 100

To Investment A/c 220100

(Being 2000 shares in Pine Co sold for 220100 less brokerage)

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