Question

On September 12, 3,500 shares of Aspen Company are acquired at a price of $39.00 per share plus a $175 brokerage commission. On October 15, a $1.20-per-share dividend was received on the Aspen Company stock. On November 10, 1,400.00 shares of the Aspen Company stock were sold for $33 per share less a $70 brokerage commission. When required, round final answers to the nearest dollar. For a compound transaction, if an amount box does not require an entry, leave it blank. Prepare the journal entries for the original purchase, the dividend, and the sale under the cost method. Sept. 12 Oct. 15 Nov. 10

Answer 1

Sept 12

Dr Investments-Aspen Company Stock 136,675

Dr Cash 136,675

Oct 15

Dr Cash 4,200

Cr Dividends Revenue 4,200

Nov 10

Dr Cash 46,130

Dr Loss on sale of Investments 8,540

Cr Investments-Aspen Company Stock 54,670

Step-by-step explanation:

Aspen Company Journal entry

Sept 12

Dr Investments-Aspen Company Stock 136,675

[(3,500*39)+175]

Dr Cash 136,675

Oct 15

Dr Cash 4,200

(3,500*1.20)

Cr Dividends Revenue 4,200

Nov 10

Dr Cash 46,130

[(1,400*33)-70]

Dr Loss on sale of Investments 8,540

(54,670-46,130)

Cr Investments-Aspen Company Stock 54,670

(136,675/3500*1,400