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Luda [366]
3 years ago
11

Marjam Company owns 63,600 shares of MacKenzie Company's 120,000 outstanding shares of common stock. MacKenzie Company pays $120

,000 in total cash dividends to its shareholders. Marjam's entry to record this transaction should include a:a. Debit to Interest Revenue for $13,780.b. Credit to Dividend Revenue for $26,000.c. Credit to Long-Term investments for $63,600.d. Credit to Long-Term Investments for $26,000.e. Debit to Dividend Revenue for $13,780.
Business
1 answer:
Tems11 [23]3 years ago
5 0

Answer:

Marjam's entry to record this transaction should include a c. Credit to Long-Term investments for $63,600.

Explanation:

Marjam investment in MacKenzie is a Financial Asset. A financial Asset is an obligation to receive cash.

Marjam will be paid a cash dividend based on the share of ownership it has in MacKenzie.

Share of Ownership = 63,600 shares/ 120,000 outstanding shares

                                  = 53%

<u>Marjam's entry to record cash dividends is as follows </u>

Dividend = $120,000 × 53%

               = $63,600

Debit : Bank $63,600

Credit : Long-Term investments $63,600

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