On August 1, 2014, Planting Haven invests the $ 15,000 (refer to Short Exercise S10-1) in Seeds,

Question:

On August 1, 2014, Planting Haven invests the $ 15,000 (refer to Short Exercise S10-1) in Seeds, Inc. stock. Seeds pays Planting a $ 500 dividend on October 1, 2014. Planting sells the Seeds’ stock on October 31, 2014, for $ 15,100. Assume the investment is categorized as a trading investment.

Requirements

1. Journalize the transactions for Planting’s investment in Seeds’ stock.

2. What was the net effect of the investment on Planting’s net income for the year ended December 31, 2014?

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...