Question

2016 Jan. 15 Purchased 12,000 shares of Van, Inc.’s common stock at $11 per share plus...

2016
Jan. 15 Purchased 12,000 shares of Van, Inc.’s common stock at $11 per share plus a brokerage commission of $900. These shares represent a 30 percent ownership of Van’s common stock.
Dec. 31 Received a cash dividend of $3.25 per share of common stock from Van.
Dec. 31 Made the adjusting entry to reflect income from the Van stock investment. Van’s 2016 net income is $86,000.
2017
Jan. 20 Sold all 12,000 shares of the Van common stock for $126,500.

Record the transactions and adjustment of the Dunn 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 (Van Answer Answer
AnswerCashGain on sale of investmentsIncome from stock investmentsLoss on sale of investmentsStock investment-influential (Van 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 (Van Answer Answer
AnswerCashGain on sale of investmentsIncome from stock investmentsLoss on sale of investmentsStock investment-influential (Van Answer Answer
To record receipt of dividend.
12/31/2016 AnswerCashGain on sale of investmentsIncome from stock investmentsLoss on sale of investmentsStock investment-influential (Van Answer Answer
AnswerCashGain on sale of investmentsIncome from stock investmentsLoss on sale of investmentsStock investment-influential (Van Answer Answer
To record portion of Van's net income.
1/20/2017 AnswerCashGain on sale of investmentsIncome from stock investmentsLoss on sale of investmentsStock investment-influential (Van Answer Answer
AnswerCashGain on sale of investmentsIncome from stock investmentsLoss on sale of investmentsStock investment-influential (Van Answer Answer
Stock investment-influential (Van) Answer Answer
To record sale of equity securities.
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Answer #2

Journal entry

Date account and explanation debit credit
Jan 15 investments Stock investment-influential (Van Inc.) (12000*11+900) 132900
Cash 132900
(To record investment)
Dec 31 Cash (12000*3.25) 39000
  investments Stock investment-influential (Van Inc.) 39000
(To record dividend)
Dec 31 investments Stock investment-influential (Van Inc.) (86000*30%) 25800
Investment revenue from investments Stock investment-influential (Van Inc.) 25800
(To record adjusting entry)
Jan 20 Cash 126500
Gain on sale of investment 6800
  investments Stock investment-influential (Van Inc.) 119700
(To record sale of investment)
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