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S15-4 (similar to) Question Help On January 1, 2018, Hamer, Inc. decides to invest in 6,500 shares of Palomino stock when the stock is selling for $20 per share. On July 1, 2018, Palomino paid a $1.00 per share cash dividend to stockholders. On December 31, 2018, Palomino reports net income of $130,000 for 2018. Assume Palomino has 26,000 shares of voting stock outstanding during 2018 and Hamer has significant influence over Palomino. Read the requirements. 130,000 Jan. 1 Equity Investments --Palomino Cash 130,000 Purchased investment in stock (equity method). July 1: Palomino paid a $1.00 per share cash dividend to stockholders. Date Accounts and Explanation Jul 1 Cash Equity Investments-Palomino Debit Credit 6,500 6,500 Received cash dividend (equity method). December 31: Palomino reports net income of $130,000 for 2018. Date Accounts and Explanation Debit Credit Dec. 31