Perry Investments bought 2,000 shares of Able, Inc

Perry Investments bought 2,000 shares of Able, Inc. common stock on January 1, 2015, for $20,000
and 2,000 shares of Baker, Inc. common stock on July 1, 2015 for $24,000. Baker paid $2,400 of
previously declared dividends to Perry on December 31, 2015. At the end of 2015, the market value of
the Able stock was $18,000 and the market value of

the Baker stock was $28,000. The stocks were purchased for short-term speculation. Perry owns 10% of
each company.

Perry should record the receipt of the Baker dividend as:

A.

DR Cash 240

CR Dividend income 240