Investment: It is a financial term which refers to spend or deposit money to get the financial benefits. The different ways in which a firm can invest are mentioned below: Long-term investments Short-term investments Short-term investments: It includes such investments which are highly liquid in nature as these can be convert in form of cash easily during the period of 1 year. Long-term investments: It includes such investments which are not highly liquid in nature and mature after completion of period of minimum one year. Journal Entry : It means record of financial data related to business transactions in a journal in a manner so that debit equals credit. It provides an audit trail to the auditor and a means to analyze the effects of transactions to an organization’s financial health. Rules of Journal Entry: The rules for journal entry are defined by 5 accounting components, Assets: Increase in asset should be debit and decrease should be credit. Liabilities: Increase in liabilities should be credit and decrease should be debit. Equity: Increase in Equity should be credit and decrease should be debit. Expense: Increase in expense should be debit and decrease should be credit. Revenue: Increase in revenue should be credit and decrease should be debit. To prepare: Journal entry for given transactions.

Question

Want to see the full answer?

Answer 1

Question

Chapter C, Problem 12E

To determine

Investment:

It is a financial term which refers to spend or deposit money to get the financial benefits.
The different ways in which a firm can invest are mentioned below:

Long-term investments

Short-term investments

Short-term investments:

It includes such investments which are highly liquid in nature as these can be convert in form of cash easily during the period of 1 year.

Long-term investments:

It includes such investments which are not highly liquid in nature and mature after completion of period of minimum one year.

Journal Entry:

It means record of financial data related to business transactions in a journal in a manner so that debit equals credit. It provides an audit trail to the auditor and a means to analyze the effects of transactions to an organization’s financial health.
Rules of Journal Entry:

The rules for journal entry are defined by 5 accounting components,

Assets: Increase in asset should be debit and decrease should be credit.

Liabilities: Increase in liabilities should be credit and decrease should be debit.

Equity: Increase in Equity should be credit and decrease should be debit.

Expense: Increase in expense should be debit and decrease should be credit.

Revenue: Increase in revenue should be credit and decrease should be debit.

To prepare: Journal entry for given transactions.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Need answer

Outstanding stock of the Bramble Corporation included 41200 shares of $5 par common stock and 10300 shares of 5%, $10 par non- cumulative preferred stock. In 2024, the company's board of directors declared and paid dividends of $4120. In 2025, the board of directors declared and paid dividends of $20600. How much of the 2025 dividend was distributed to preferred shareholders? ○ $9270 ○ $15450 $5150 ○ None of these answer choices are correct.

Cullumber Supply Company has 11500 shares of 5%, $100 par value, cumulative preferred stock and 23000 shares of $1 par value common stock. The board of directors declares and pays a $103500 dividend. There were no dividends in arrears. What amount of dividends will be received by the common stockholders? $46000 $57500 $103500 $0