Exercise 12-6 On February 1, Rinehart Company purchased 640 shares (2% ownership

Question

Exercise 12-6 On February 1, Rinehart Company purchased 640 shares (2% ownership) of Givens Company common stock for $32 per share. On March 20, Rinehart Company sold 128 shares of Givens stock for $3,712. Rinehart received a dividend of $3.00 per share on April 25. On June 15, Rinehart sold 256 shares of Givens stock for $9,728. On July 28, Rinehart received a dividend of $1.00 per share. Prepare the journal entries to record the transactions described above. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275. Record journal entries in the order presented in the problem.,) Date Account Titles and Explanation Credit Mar. 20

Explanation / Answer

Date Account titles & Explanation Debit Credit 1-Feb Stock investment 20480 cash 20480 (640*32) 20-Mar Cash 3,712 loss on sale if investment 384 Stock investment (128*32) 4096 25-Apr Cash 1536 Dividend income 1,536 (640-128)*3 15-Jun Cash 9,728 Gain on sale of investment 1,536 Stock investment (256*32) 8192 28-Jul Cash 256 dividend income 256 (640-128-256)*1

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