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Basics of Equity – Cost Method Prepare the journal entries for the following transactions for Morgan...

Basics of Equity – Cost Method Prepare the journal entries for the following transactions for Morgan Co (a) Morgan Co. purcahsed 13,000 shares of Gordon Corp. stock for $10 per share plus a $1300 commission. (b) Morgan Co. sold 3000 shares of Gordon Corp. stock for $18 per hsare less a $200 commission. (c) Morgan Co. received a $.40 per share dividend from Gordon Corp. Stock.

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Answer #1
Journal Entry
S. No. Account Desription , Title Debit Credit
a Investment in Gordon Corp $131,300.00
Cash $131,300.00
To record purchase of 13000 Share @$10 & Comission
b. Investment in Gordon Corp (3000*$18-200) 53800
Cash 53800
To Record sale of 3000 Shares @$18
c. Cash (10000 Share*$0.40) $4,000.00
Investment in Gordon Corp $4,000.00
To Record Dividend Recevied
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