Exercise 12-5 Nosker Inc. had the following transactions pertaining to investmen

Question

Exercise 12-5

Nosker Inc. had the following transactions pertaining to investments in common stock.

Journalize the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

Date

Account Titles and Explanation

Debit

Credit

Jan. 1 Purchased 2,800 shares of Escalante Corporation common stock (6%) for $156,800 cash. July 1 Received a cash dividend of $2 per share. Dec. 1 Sold 560 shares of Escalante Corporation common stock for $35,840 cash. Dec. 31 Received a cash dividend of $2 per share.

Explanation / Answer

Date Title Debit Credit Jan-01 Investment in Escalante Corporation   $ 156,800 Cash $ 156,800 (To record purchase of 2,800 6% common stock) Jul-01 Cash ($2*2,800) $      5,600 Dividend income $      5,600 (To record receipt of $2 dividend per share) Dec-01 Cash $    35,840 Investment in Escalante Corporation ($156,800/2,800*560) $    31,360 Gain on sale of investments $      4,480 (To record sale of 560 shares) Dec-31 Cash ($2*(2,800-560) $      4,480 Dividend income $      4,480 (To record receipt of $2 dividend per share)

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