Gaines Corporation invested $124,000 to acquire 21,000 shares of Owens Technologies, Inc. on March 1, 2024. On July 2, 2025, Owens pays a cash dividend of $1.25 per share. The investment is classified as equity securities with no significant influence. Which of the following is the correct journal entry to record the transaction on July 2, 2025? O Cash 26,250 Equity Investments O Cash Dividend Revenue O Equity Investments Cash O Cash Retained Earnings 26,250 26,250 26,250 26,250 26,250 26,250 26,250
Gaines Corporation invested $124,000 to acquire 21,000 shares of Owens Technologies, Inc. on March 1, 2024. On July 2, 2025, Owens pays a cash dividend of $1.25 per share. The investment is classified as equity securities with no significant influence. Which of the following is the correct journal entry to record the transaction on July 2, 2025? O Cash 26,250 Equity Investments O Cash Dividend Revenue O Equity Investments Cash O Cash Retained Earnings 26,250 26,250 26,250 26,250 26,250 26,250 26,250
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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
Transcribed Image Text:Gaines Corporation invested $124,000 to acquire 21,000 shares of Owens Technologies, Inc. on March 1, 2024. On July 2, 2025, Owens pays a cash dividend of $1.25 per share. The investment is classified as equity securities with no significant influence. Which of the following is the correct journal entry to record the transaction on July 2, 2025?
- Option 1:
- Debit: Cash 26,250
- Credit: Equity Investments 26,250
- Option 2:
- Debit: Cash 26,250
- Credit: Dividend Revenue 26,250
- Option 3:
- Debit: Equity Investments 26,250
- Credit: Cash 26,250
- Option 4:
- Debit: Cash 26,250
- Credit: Retained Earnings 26,250
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