Entries for Investment in Stock, Receipt of Dividends, and Sale of Shares

On February 22, Stewart Corporation acquired 12,000 shares of the 400,000 outstanding shares of Edwards Co. common stock at $50 plus commission charges of $120. On June 1, a cash dividend of $1.40 per share was received. On November 12, 4,000 shares were sold at $62 less commission charges of $100.

In your computations, round per share amounts to two decimal places. When required, round final answers to the nearest dollar.

a. Using the cost method, journalize the entry for the purchase of stock.

Feb. 22

b. Using the cost method, journalize the entry for the receipt of dividends.

June 1

c. Using the cost method, journalize the entry for the sale of 4,000 shares.

For a compound transaction, if an amount box does not require an entry, leave it blank.

Nov. 12

Entries for Investment in Bonds, Interest, and Sale of Bonds

Gonzalez Company acquired $200,000 of Walker Co., 6% bonds on May 1 at their face amount. Interest is paid semiannually on May 1 and November 1. On November 1, Gonzalez Company sold $70,000 of the bonds for 97.

Journalize entries to record the following in Year 1:

For a compound transaction, if an amount box does not require an entry, leave it blank.

a. The initial acquisition of the bonds on May 1.

May 1

b. The semiannual interest received on November 1.

Nov. 1

c. The sale of the bonds on November 1.

Nov. 1

d. The accrual of $1,300 interest on December 31.

Dec. 31

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