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Sandhill Company had these transactions pertaining to stock investments:
Feb. 1 Purchased 1,257 shares of BJ common stock (2% of outstanding shares) for $8,799.
July 1 Received cash dividends of $2 per share on BJ common stock.
Sept. 1 Sold 490 shares of BJ common stock for $5,381.
Dec. 1 Received cash dividends of $1 per share on BJ common stock.
Required:
a. Journalize the transactions.

Respuesta :

Answer and Explanation:

The journal entries are shown below:

On Feb 1

Stock investment Dr $8,799

        To Cash $8,799

(Being the common stock is purchased)        

On July 1

Cash Dr $2,514   (1,257 × $2)

  To Dividend revenue $2,514

(Being the cash dividend received)

On Sep 1

Cash $5,381

      To Stock investment  $3,430   ($8,799 ÷ 1,257 shares × 490 shares

      To gain on sale $1,951

(Being the sale is recorded)

On Dec 1

Cash Dr  $767   (1,257 shares - 490 shares)

   To Dividend revenue $767

(Being the cash dividend received is recorded)

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