Question

The following equity investment transactions were completed by Romero Company during a recent year: Apr. 10...

The following equity investment transactions were completed by Romero Company during a recent year:

Apr. 10 Purchased 3,800 shares of Dixon Company for a price of $49 per share plus a brokerage commission of $120.
July 8 Received a quarterly dividend of $0.90 per share on the Dixon Company investment.
Sept. 10 Sold 1,200 shares for a price of $41 per share less a brokerage commission of $90.

Journalize the entries for these transactions. Refer to the Chart of Accounts for exact wording of account titles. When required, round your answers to the nearest dollar.

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Answer #1

Journal entry

date account and explanation debit credit
Apr 10 Stock investment (3800*49+120) 186320
Cash 186320
(TO record investment)
July 8 Cash (3800*.9) 3420
Dividend revenue 3420
(To record dividend)
Sep 10 Cash (1200*41-90) 49110
Loss on sale of stock investment 9728
stock investment (186320/3800*1200) 58838
(To record share sale)
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