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Sells Company accounts for its investment in OFO, Inc. under the available-for-sale method. How should Sells Company record a cash dividend received from OFO
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Sells Company accounts for its investment in OFO, Inc. under the available-for-sale method. How should Sells Company record a cash dividend received from OFO

User Tinkerer
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Answer:

the journal entry should be:

Dr Cash X

Cr Dividend revenue X

When a company holds securities as an investment and classifies them as available for sale (AFS), any dividends received will be recorded as revenue.

Dividend revenue is reported in the income statement.

User Merna
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