Diann Company had the following transactions pertaining to share investments. Feb.1 Purchased 600 ordinary shares of Ronn

Question:

Diann Company had the following transactions pertaining to share investments.
Feb.1 Purchased 600 ordinary shares of Ronn (2%) for $6,200.
July.1 Received cash dividends of $1 per share on Ronn ordinary shares.
Sept.1 Sold 300 ordinary shares of Ronn for $4,300.
Dec.1 Received cash dividends of $1 per share on Ronn ordinary shares.

Instructions
(a) Journalize the transactions.
(b) Explain how dividend revenue and the gain (loss) on sale should be reported in the income statement.

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...