Question

Culver Corporation purchased 700 common shares of Ditch Inc. for $12,600 on February 21. Culver paid a 1% commission on the share purchase and, because the shares were not publicly traded, decided to account for them following the cost model. On June 30, Ditch declared and paid a cash dividend of $1.20 per share. Prepare Culver Corporation's journal entry to record the purchase of the investment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Date Account Titles and Explanation Debit Credit February 21 e Textbook and Media List of Accounts Prepare Culver Corporation's journal entry to record the dividends received. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Date Account Titles and Explanation Debit Credit June 30 e Textbook and Media List of Accounts

Answer 1

		Debit	Credit
February 21	Investment in shares of Ditch Inc	12726		=12600+(12600*1%)
	Cash		12726
June 30	Cash	840		=700*1.20
	Dividends Revenue		840
	Cash	14256		=14400*(1-1%)
	Investment in shares of Ditch Inc		12726
	Gain on sale of Investment		1530