On October 1, 2016, Chicago Corp. purchases 1,000 shares of the preferred stock of Denver Corp. for

Question:

On October 1, 2016, Chicago Corp. purchases 1,000 shares of the preferred stock of Denver Corp. for S40 per share. Chicago pays another $1,000 in commissions. On October 20, 2016, Denver declares and pays a of $1 per share. Chicago sells the stock on November 5, 2016, at a price of $45 per share.
Required
Prepare all necessary journal entries on Chicago's books in connection with its investment, begin ring with the purchase of the preferred stock on October 1, 2016; the received on October 20, 2016; and the sale on November 5, 2016.
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...