Asked by
Chester Atkinson
on Dec 16, 2024Verified
Blanton Corporation purchased 35% of the outstanding shares of common stock of Worton Corporation as a long-term investment. Subsequently, Worton Corporation reported net income and declared and paid cash dividends. What journal entry would Blanton Corporation use to record the dividends it receives from Worton Corporation?
A) debit Investments-Worton Corporation Stock; credit Cash
B) debit Cash; credit Dividend Revenue
C) debit Investments-Worton Corporation Stock; credit Income of Worton Corporation
D) debit Cash; credit Investments-Worton Corporation Stock
Dividend Revenue
Income earned from an investment in the form of dividends, typically from holding shares of another company.
Outstanding Shares
Outstanding shares refer to the total number of shares of stock that are owned by shareholders at any given time, including shares held by institutional investors and restricted shares held by company insiders.
- Determine the correct method for accounting for dividends and interest earned on investments.
Verified Answer
IA
Learning Objectives
- Determine the correct method for accounting for dividends and interest earned on investments.
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