Question

2016 Jan. 15 Purchased 15,000 shares of Park, Inc.’s common stock at $10 per share plus...

2016
Jan. 15 Purchased 15,000 shares of Park, Inc.’s common stock at $10 per share plus a brokerage commission of $1,000. These shares represent a 25 percent ownership of the Park common stock.
Dec. 31 Received a cash dividend of $2.80 per share of common stock from Park.
Dec. 31 Made the adjusting entry to reflect income from the Park stock investment. Park’s 2016 net income is $124,000.
2017
Jan. 20 Sold all 15,000 shares of the Park common stock for $136,000.

Record the transactions and adjustment of the Prince Company using journal entries.

General Journal
Date Description Debit Credit
1/15/2016 AnswerCashGain on sale of investmentsIncome from stock investmentsLoss on sale of investmentsStock investment-influential (Park Answer Answer
AnswerCashGain on sale of investmentsIncome from stock investmentsLoss on sale of investmentsStock investment-influential (Park Answer Answer
To record purchase of equity securities.
12/31/2016 AnswerCashGain on sale of investmentsIncome from stock investmentsLoss on sale of investmentsStock investment-influential (Park Answer Answer
AnswerCashGain on sale of investmentsIncome from stock investmentsLoss on sale of investmentsStock investment-influential (Park Answer Answer
To record receipt of dividend.
12/31/2016 AnswerCashGain on sale of investmentsIncome from stock investmentsLoss on sale of investmentsStock investment-influential (Park Answer Answer
AnswerCashGain on sale of investmentsIncome from stock investmentsLoss on sale of investmentsStock investment-influential (Park Answer Answer
To record portion of Park's net income.
1/20/2017 Cash Answer Answer
AnswerCashGain on sale of investmentsIncome from stock investmentsLoss on sale of investmentsStock investment-influential (Park Answer Answer
AnswerCashGain on sale of investmentsIncome from stock investmentsLoss on sale of investmentsStock investment-influential (Park Answer Answer
To record sale of equity securities.
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Answer #2

Journal entries

Date account and explanation debit credit
Jan 10 investments Stock investment-influential (Park Inc) 151000
Cash 151000
(To record investment)
Dec 31 Cash (15000*2.8) 42000
  investments Stock investment-influential (Park Inc) 42000
(To record dividend)
Dec 31 investments Stock investment-influential (Park Inc) (124000*25%) 31000
Investment revenue in investments Stock investment-influential (Park Inc) 31000
(To record net income)
Jan 20 Cash 136000
Loss on sale of investment 4000
investments Stock investment-influential (Park Inc) (151000+31000-42000) 140000
(To record sale of investment)
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