Blanton Corporation purchased 12% 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?
debit Investment in Worton Corporation; credit Cash
debit Cash; credit Dividend Revenue
debit Investment in Worton Corporation; credit Income of Worton Corporation
debit Cash; credit Investment in Worton Corporation
Solution
The journal entry that would be passed in this case is = First option = debit investment in Worton Corporation and Credit Cash.
Regards.
.
Blanton Corporation purchased 12- of the outstanding shares of common.docx
1. Blanton Corporation purchased 12% 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?
debit Investment in Worton Corporation; credit Cash
debit Cash; credit Dividend Revenue
debit Investment in Worton Corporation; credit Income of Worton Corporation
debit Cash; credit Investment in Worton Corporation
debit Investment in Worton Corporation; credit Cash
debit Cash; credit Dividend Revenue
debit Investment in Worton Corporation; credit Income of Worton Corporation
debit Cash; credit Investment in Worton Corporation
Solution
The journal entry that would be passed in this case is = First option = debit investment in Worton
Corporation and Credit Cash.
Regards.
