Accounting
27th Edition
ISBN: 9781337272094
Author: WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher: Cengage Learning,
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Chapter 15, Problem 15.7EX
To determine
Stock investments: Stock investments are equity securities which claim ownership in the investee company and pay a dividend revenue to the investor company.
Debit and credit rules:
- Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in
stockholders’ equity accounts. - Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.
To journalize: The stock investment transactions in the books of Company R
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Entries for Investment in Stock, Receipt of Dividends, and Sale of Shares
The following equity investment transactions were completed by Romero Company during a recent year:
Apr. 10.
July 8.
Purchased 1,800 shares of Dixon Company for a price of $57.75 per share plus a brokerage commission of $450.
Received a quarterly dividend of $0.35 per share on the Dixon Company investment.
Sept. 10. Sold 1,200 shares for a price of $52 per share less a brokerage commission of $250.
Journalize the entries for these transactions. If required, round the final answers to the nearest dollar.
For a compound transaction, if an amount box does not require an entry, leave it blank.
Apr. 10 - Purchase Investments-Dixon Company Stock
Cash
✓
K
July 8 Dividend
Cash
✓
Dividend Revenue
Sept. 10 Sale
Cash
✓
Loss on Sale of Investments
Investments-Dixon Company Stock
✓
Entries for Investment in Stock, Receipt of Dividends, and Sale of Shares
The following equity investment transactions were completed by Romero Company during a recent year:
Apr. 10.
Purchased 1,700 shares of Dixon Company for a price of $45.75 per share plus a brokerage commission of $425.
July 8.
Received a quarterly dividend of $0.45 per share on the Dixon Company investment.
Sept. 10.
Sold 1,100 shares for a price of $41 per share less a brokerage commission of $240.
Journalize the entries for these transactions. If required, round the final answers to the nearest dollar.
For a compound transaction, if an amount box does not require an entry, leave it blank.
Apr. 10 - Purchase
fill in the blank 2
fill in the blank 4
July 8 - Dividend
fill in the blank 6
fill in the blank 8
Sept. 10 - Sale
fill in the blank 10
fill in the blank 11
fill in the blank 13
fill in the blank 14
fill in the blank 16
fill in the blank 17
Entries for investment in stock, receipt of dividends, and sale of sharesThe following equity investment transactions were completed byRomero Company during a recent year:
Apr. 10. Purchased 5,000 shares of Dixon Company for a price of $25 pershare plus a brokerage commission of $75.July 8. Received a quarterly dividend of $0.60 per share on the Dixon
Company investment.Sept 10. Sold 2,000 shares for a price of $22 per share less a brokeragecommission of $120. Journalize the entries for these transactions.
Chapter 15 Solutions
Accounting
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