The following equity investment transactions were completed by Romero Company during a recent year:

Apr. 10 Purchased 3,600 shares of Dixon Company for a price of $51 per share plus a brokerage commission of $95.

July 8 Received a quarterly dividend of $0.95 per share on the Dixon Company investment.

Sept. 10 Sold 2,000 shares for a price of $41 per share less a brokerage commission of $75.

Journalize the entries for these transactions.

The journal entries will look as follows:

Explanation:

Date Particulars Dr ($) Cr ($)

Apr 10 Investments - Dixon (w. 1.) 183,695

Cash (w. 1.) 183.695

(To record total value of investment in Dixon Company.)

July 8 Cash 3,420

Dividend revenue (w. 2.) 3,420

(To record dividend revenue from Dixon Company shares.)

Sept. 10 Cash (w. 3.) 81,925

Loss on investment sold (w. 5.) 20,128

Investments - Dixon (w. 4.) 102,053

(To record sales of investment in Dixon Company.)

Workings:

w. 1. Total value of investment in Dixon Company = (3,600 * $51) + $95 = $183,695

w. 2. Dividend revenue = 3,600 * $0.95 = $3,420

w. 3. = Cash = (2,000 * 41) - $75 = $81,925

w. 4. Value of investment in Dixon = ($183,695 / $3,600) * 2,000 = $102,053

w. 5. Loss on sale of investment = w. 3. - w. 4. = $102,053 - $81,925 = $20,128