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On February 12, 5,000 shares of Mid-Ex Company are acquired at a price of $24 per share plus a $200 brokerage fee
On February 12, 5,000 shares of Mid-Ex Company are acquired at a price of $24 per share plus a $200 brokerage fee. On April 22, a $0.36-per-share dividend was received on the Mid-Ex Company stock. On May 10, 4,000 shares of the Mid-Ex Company stock were sold for $31 per share less a $160 brokerage fee. Prepare the journal entries for the original purchase, dividend, and sale.
Expert Solution
Feb. 12 Investments-Mid-Ex Company Stock........... 120,200*
Cash........................................................................... 120,200
*(5,000 shares × $24 per share) + $200
Apr. 22 Cash...................................................................... 1,800*
Dividend Revenue..................................................... 1,800
*$0.36 per share × 5,000 shares
May 10 Cash.................................................................. 123,840*
Gain on Sale of Investments...................................... 27,680
Investments-Mid-Ex Company Stock.................... 96,160**
*(4,000 shares × $31) - $160
**4,000 shares × ($120,200/5,000 shares)
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