Looking for answer to question 2. I believe the journal entried to be correct.

Accounting for stock investments Creative Investments completed these long-term, available-for-sale investment transaction during 2014.

Jan 14 Purchased 500 shares of Microscape stock, paying $54 per share. The investment represent 2% ownership in Microscape voting stock. Creative intends to hold the investment for the indefinite future.

Aug 22 Received cash dividend of $0.30 per share on the Microscape stock.

Dec 31 Adjusted the investment to its current market value of $52 per share.

Dec 31 Microscape reported net income of $200,000 for the year ended 2014

Requirements

1.Journalize Creatives investment transactions. Explanations are not required.

Date	Account Title and Explanation	Debit	Credit
Jan 14, 2014	Long-term Investments-Available for Sale	27,000
	Cash		27,000
	Purchased investment stock (500 * $54)
Aug 22, 2014	Cash	150
	Dividend Received		150
	Received cash dividend (500 * $0.30)
Dec 31, 2014	Cash	26,000
	Loss on disposal	1,000
	Long-term Investments-Available for Sale		27,000
	Disposed of Investment in stock

2.Classify and prepare partial financial statements for Creatives Microscape investment as of December 31, 2014. Assume Creative Investments net income for the year is $80,000.