The following information is related to the short-term passive investments of Solo Company. Securities held on December 31, 2016 are described in the table below.
$\begin{array}{|r|r|r|r|r|r|}
\hline\text { Securities } &\text { No. of }& \text { Cost/Share } &\text { Total } & \text { Value/Share } &\text { Total Market } \
&\text { Shares }&&\text { Cost }&&\text { Value }\
\hline\text { AAA } & 100 & \$ 29 & \$ 2,900 & \$ 34 & \$ 3,400 \
\hline \text { BBB } & 250 & 30 & 7,500 & 28 & 7,000 \
\hline \text { CCC } & 150 & 16 & 2,400 & 20 & 3,000 \
\hline&&&\$12,800&&\$13,400\
\hline
\end{array}$
Early in 2017, the company sold 50 shares of BBB for $26 per share. During 2017, Solo received dividends of $3 per share on the remaining 200 shares of BBB, and dividends of $2.50 per share were declared, but not yet received on the 150 shares of CCC stock. The per-share market values of BBB and CCC on December 31, 2017, were $24 and $18, respectively. During 2018, Solo sold the remaining 200 shares of BBB stock for $26 per share and the 150 shares of CCC for $22 per share.
The journal entries to record the dividends received on the BBB securities and the dividends declared on the CCC stock in 2017 will include:

Question

The following information is related to the short-term passive investments of Solo Company. Securities held on December 31, 2016 are described in the table below.
$\begin{array}{|r|r|r|r|r|r|}
\hline\text { Securities } &\text { No. of }& \text { Cost/Share } &\text { Total } & \text { Value/Share } &\text { Total Market }  \
&\text { Shares }&&\text { Cost }&&\text { Value }\
\hline\text { AAA } & 100 & \$ 29 & \$ 2,900 & \$ 34 & \$ 3,400 \
\hline \text { BBB } & 250 & 30 & 7,500 & 28 & 7,000 \
\hline \text { CCC } & 150 & 16 & 2,400 & 20 & 3,000 \
\hline&&&\$12,800&&\$13,400\
\hline
\end{array}$ 
Early in 2017, the company sold 50 shares of BBB for $26 per share. During 2017, Solo received dividends of $3 per share on the remaining 200 shares of BBB, and dividends of $2.50 per share were declared, but not yet received on the 150 shares of CCC stock. The per-share market values of BBB and CCC on December 31, 2017, were $24 and $18, respectively. During 2018, Solo sold the remaining 200 shares of BBB stock for $26 per share and the 150 shares of CCC for $22 per share.
The journal entries to record the dividends received on the BBB securities and the dividends declared on the CCC stock in 2017 will include:

Quizplus · Accepted Answer

The journal entry to record the dividends received on the BBB securities will be:

Debit: Cash ($3 x 200 shares) = $600
Credit: Dividend Revenue ($3 x 200 shares) = $600

The journal entry to record the dividends declared on the CCC stock will be:

Debit: Dividend Expense ($2.50 x 150 shares) = $375
Credit: Dividend Payable ($2.50 x 150 shares) = $375

Therefore, the correct choice is A, which includes a credit to Dividend Revenue for $975 ($600 for BBB and $375 for CCC).

The Following Information Is Related to the Short-Term Passive Investments