Aurum Services, Inc. acquired 100,000 shares of Gamma Metals, Inc. on January 1, 2017. Gamma pays a cash dividend of $0.25 per share on March 2, 2017. With the current investment, Aurum Services, Inc. holds 8% of Gamma. In the journal entry on March 2, 2017, _______.ALong-term Investments—Available-for-Sale is creditedBLong-term Investments—Held-to-Maturity is debitedCLong-term Investments—Available-for-Sale is debitedDDividend Revenue is credited

Answered: Aurum Services, Inc. acquired 100,000…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Aurum Services, Inc. acquired 100,000 shares of Gamma Metals, Inc. on January 1, 2017. Gamma pays a cash dividend of $0.25 per share on March 2, 2017. With the current investment, Aurum Services, Inc. holds 8% of Gamma. In the journal entry on March 2, 2017, _______.

A	Long-term Investments—Available-for-Sale is credited
B	Long-term Investments—Held-to-Maturity is debited
C	Long-term Investments—Available-for-Sale is debited
D	Dividend Revenue is credited

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Aurum services acquired 100000 shares on gamma metals and receive a cash dividend from gamma metals inc. It means cash dividend is the income of Aurum services inc.

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