Roe Corporation owns 2,000 shares of WRJ Corporation stock.WRJ Corporation has 25,000 shares of stock outstanding.WRJ paid $4 per share in cash dividends to its stockholders.The entry to record the receipt of these dividends is:

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The entry to record the receipt of cash dividends is to debit Cash for the amount received ($8,000) and credit Dividend Revenue for the same amount. Since Roe Corporation owns 2,000 shares out of 25,000 shares total, it is assumed that they hold less than 20% of the outstanding shares, which means they do not have significant influence over WRJ Corporation and Long-Term Investments should not be used in the journal entry. Unrealized Gain-Equity is also not applicable in this situation.

Roe Corporation Owns 2,000 Shares of WRJ Corporation Stock