Micron owns 35% of Martok. Martok pays a total of $47,000 in cash dividends for
ID: 2434772 • Letter: M
Question
Micron owns 35% of Martok. Martok pays a total of $47,000 in cash dividends for the period. Micron's entry to record the dividend transaction would include a:Credit to Long–Term Investments for $16,450.
Debit to Long–Term Investments for $16,450.
Debit to Cash for $47,000.
Credit to Cash for $16,450.
Credit to Investment Revenue for $47,000.
Everrine Corporation owns 3,000 shares of JRW Corporation. JRW Corporation has 25,000 shares of stock outstanding. JRW paid $4 per share in cash dividends to its stockholders. The entry to record the receipt of these dividends is:
Debit Cash, $12,000; credit Long-Term Investments, $12,000.
Debt Long-Term Investment, $12,000; credit Cash, $12,000.
Debit Cash, $12,000; credit Dividend Revenue, $12,000. Debit Unrealized Gain-Equity, $12,000; credit Cash, $12,000.
Debit Cash, $12,000; credit Unrealized Gain-Equity, $12,000.
Explanation / Answer
1 Micron's entry to record the dividend transaction would include a : Credit to Long - Term Investments for $16,450 . The corresponding debit would be given to Cash. (In this case,since the holding interest is more than 20%, Equity method is used.) 2 The entry to record the receipt of dividend would be : Debit Cash $12,000 , Credit Dividend Revenue $12,000