. Record Investor Corporation’s journal entry for each of the following events.

Question

. Record Investor Corporation’s journal entry for each of the following events.

a. Investor Corporation purchases 600 shares of stock in Company A for $60 per share on December 6, Year One. This investment is considered a trading security.

b. At the end of Year One, Company A shares are selling for $63 each.

c. On January 31, Year Two, Company A pays a cash dividend of $2 per share.

d. At the end of Year Two, Company A shares are selling for $59 each.

e. On January 22, Year Three, Investor sells all of the shares of Company A for $62 each

Explanation / Answer

a)

Investment in Company A Dr 36000 (600*60)

Cash Cr 36000

b)

Investment in Company A Dr 1800 [(63*600) - 36000]

Profit and Loss Cr 1800

c)

Cash Dr 1200 (600*2)

Dividend Income Cr 1200

d)

Profit and Loss Dr 2400

Investment in Company A Cr 2400 [37800 - (59*600)]

e)

Cash Dr 37200 (600*62)

Investment in company A Cr 35400

Profit and Loss Cr 1800

Related Questions

Navigate

• Browse (All)
• Browse #
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.