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19 July, 22:13

On May 15, 2018 , Mega Co. invests $ 10 comma 000 in Saddle , Inc. stock. Saddle pays Mega a $ 900 dividend on November 15, 2018. Mega sells the Saddle stock on December 10, 2018 , for $ 9 comma 700. Assume the Mega Co. does not have significant influence over Saddle , Inc. Journalize the 2018 transactions related to Mega 's investment in Saddle stock. (Record debits first, then credits. Select the explanation on the last line of the journ

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  1. 19 July, 22:45
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    Answer and Explanation:

    According to the scenario, Journal Entry of the given data are as follows:

    15-5-2018 Equity Investment A/c Dr. $10,000

    To Cash A/c $10,000

    (Being Investment on purchased stock is recorded)

    15-11-2018 Cash A/c Dr. $900

    To Dividend Revenue A/c $900

    (Being Cash dividend received is recorded)

    10-12-2018 Cash A/c Dr. $9,700

    Disposal Loss A/c Dr. $300

    To Equity Investment A/c $10,000

    (Being Disposed off investment is recorded)
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