Question

xercise 16-06

On February 1, Sunland Company purchased 900 shares (2% ownership) of Givens Company common stock for $32 per share. On March 20, Sunland Company sold 180 shares of Givens stock for $5,220. Sunland received a dividend of $2.00 per share on April 25. On June 15, Sunland sold 360 shares of Givens stock for $13,680. On July 28, Sunland received a dividend of $1.75 per share.

Prepare the journal entries to record the transactions described above. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275. Record journal entries in the order presented in the problem.)

Date	Account Titles and Explanation	Debit	Credit
Feb. 1Mar. 20Apr. 25June 15July 28
Feb. 1Mar. 20Apr. 25June 15July 28
Feb. 1Mar. 20Apr. 25June 15July 28
Feb. 1Mar. 20Apr. 25June 15July 28
Feb. 1Mar. 20Apr. 25June 15July 28

Answer 1

Solution

Credit Debit $ 28,800 =900*32 Date Account Titles and Explanation 01-Feb Investment in Shares A/c...Dr To Bank A/C (To record share purchase) $ 28,800 $ 5,200 $ 560 20-Mar Bank A/c...Dr Loss on sale of Investment A/c...Dr To Investment in Shares A/C (To record sale of share at loss) =5760-560 $ 5,760 =180*32 $ 1,440 = (900-180)*2 25-Apr Bank A/c.Dr To Dividend Income A/C (To record receipt of dividend) $ 1,440 $ 13,680 15-Jun Bank A/c...Dr To Gain on sale of Investment A/c...Dr To Investment in Shares A/C (To record sale of share at profit) $ 2,160 =13680-11520 $ 11,520 =360*32 $ 630 =(900-180-360) *1.75 28-Jul Bank A/c... Dr To Dividend Income A/C (To record receipt of dividend) $ 630