Autumn Services, Inc. acquired 100,000 shares of Spring Metals, Inc. on January

Question

Autumn Services, Inc. acquired 100,000 shares of Spring Metals, Inc. on January 1, 2018. Spring declares a cash dividend of $2.25 per share on February 15, 2019 and pays the cash dividend on March 2, 2019. With the current investment Autumn Services, Inc. holds 1 1% of Spring's voting stock which of the following will be the correct journal entry for the day when the dividend payment is made (March 2, 2019)? O A. No Entry O B. Cash O C. Cash O D. Cash 225,000 Dividend Receivable 225,000 Retained Earnings 225,000 225,000 Equity Investments 225,000

Explanation / Answer

The answer is " D. Debit-Cash-225,000 Credit-Equity Investments-225,000 "

The above entry will be passed when dividend payment is made.

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