On February 15,Jewel Company buys 7,000 shares of Marcelo Corp.common stock at $28.53 per share plus a brokerage fee of $400.The stock is classified as available-for-sale securities.This is the company's first and only investment in available-for-sale securities.On March 15,Marcelo Corp.declares a dividend of $1.15 per share payable to stockholders of record on April 15.Jewel Company received the dividend on April 15 and ultimately sells half of the Marcelo Corp.stock on November 17 of the current year for $29.30 per share less a brokerage fee of $250.The journal entry to record the dividend on April 15 is:

Question

Quizplus · Accepted Answer

The journal entry to record the dividend received should be a debit to Cash for the amount received ($8,050) and a credit to Dividend Revenue for the same amount. Therefore, option B is the correct choice. Option A is incorrect because it does not specify the correct amount of the dividend received. Option C is incorrect because the transaction is related to dividends, not interest. Option D is incorrect for the same reason. Option E is incorrect because it relates to the sale of investments, not the receipt of dividends.

On February 15,Jewel Company Buys 7,000 Shares of Marcelo Corp