On February 15, Jewel Company buys 6,100 shares of Marcelo Corp. common stock at
ID: 2511860 • Letter: O
Question
On February 15, Jewel Company buys 6,100 shares of Marcelo Corp. common stock at $28.72 per share plus a brokerage fee of $400. The stock is classified as available-for-sale securities. On March 15, Marcelo Corp. declares a dividend of $1.24 per share payable to stockholders of record on April 15. Jewel Company received the dividend on April 15 and ultimately sells half of the Marcelo Corp. stock on November 17 of the current year for $29.49 per share less a brokerage fee of $250. The journal entry to record the dividend on April 15 is:
Debit Cash $7,564; credit Gain on Sale of Investments $7,564.
Debit Cash $7,564; credit Dividend Revenue $7,564.
Debit Cash $7,564; credit Interest Revenue $7,564.
Debit Cash $6,611; credit Interest Revenue $6,611.
Debit Cash $6,611; credit Dividend Revenue $6,611.
On February 15, Jewel Company buys 6,100 shares of Marcelo Corp. common stock at $28.72 per share plus a brokerage fee of $400. The stock is classified as available-for-sale securities. On March 15, Marcelo Corp. declares a dividend of $1.24 per share payable to stockholders of record on April 15. Jewel Company received the dividend on April 15 and ultimately sells half of the Marcelo Corp. stock on November 17 of the current year for $29.49 per share less a brokerage fee of $250. The journal entry to record the dividend on April 15 is:
Explanation / Answer
Dividend received from the available - for - sale securities is treates as normal revenue, if there is any interest revenue than it will be credited to interest and if there is any dividend income than dividend revenue will be credit.
So , Entry will be passsed as below,
Answer = Option 2 = Debit Cash $7,564; credit Dividend Revenue $7,564.
Journal Entries Date Account Title and explanation Debit Credit Cash (6,100 shares X $ 1.24) $ 7,564 To Dividend Revenue $ 7,564 (To Record the dividend revenue )Related Questions
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