Hamasaki Company owns 30% of CDW Corp. stock. Hamasaki received $6,500 in cash dividends from its investment in CDW. The entry to record receipt of these dividends includes a debit to Cash for $6,500 and a credit to Long-Term Investments for $6,500.

Question

Quizplus · Accepted Answer

The entry to record receipt of cash dividends from an investment in another company typically involves a debit to Cash and a credit to the Long-Term Investments account. As Hamasaki Company owns 30% of CDW Corp. stock, it would be considered a long-term investment. Therefore, the entry to record the receipt of $6,500 in cash dividends would include a debit to Cash for $6,500 and a credit to the Long-Term Investments account for $6,500.

Hamasaki Company Owns 30% of CDW Corp