Question

On April 18, Riley Co. made a short-term investment in 440 common shares of XLT Co. The purchase price is $56 per share and the broker's fee is $390. The intent is to actively manage these shares for profit. On May 30, Riley Co. receives $1.30 per share from XLT in dividends.
a. Prepare the April 18 and May 30 joumal entries to record these transactions.

Answer 1

Explanation:

General Journal

April 18

Debit Short-term Investments 25,030

Credit Cash 25,030

(440x$56= 24,620+390) = 25,030

May 30 ,

Debit Cash 572

Credit Dividend Revenue 572

1.30×440= 572