On August 1, 2021, Sweetwater Ltd. purchased 1,100 Datawave Inc. common shares for $44,900 cash with...

 

Transcribed Image Text:

On August 1, 2021, Sweetwater Ltd. purchased 1,100 Datawave Inc. common shares for $44,900 cash with the intention of trading the shares and using the fair value through profit or loss model. Datawave declared a dividend of $1 per common share, which Sweetwater received on December 28, 2021. On December 31, 2021, Sweetwater's year end, the shares' fair value was $50,200. (a) Your answer is correct. Prepare the journal entry to record the purchase of this investment on August 1. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) (b) Date Account Titles and Explanation Aug. 1 Trading Investments Cash eTextbook and Media List of Accounts Debit Date Account Titles and Explanation Dec. 28 44900 Debit Credit 44900 Prepare the journal entry to record the receipt of the dividend on December 28. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Attempts: unlimited Credit On August 1, 2021, Sweetwater Ltd. purchased 1,100 Datawave Inc. common shares for $44,900 cash with the intention of trading the shares and using the fair value through profit or loss model. Datawave declared a dividend of $1 per common share, which Sweetwater received on December 28, 2021. On December 31, 2021, Sweetwater's year end, the shares' fair value was $50,200. (a) Your answer is correct. Prepare the journal entry to record the purchase of this investment on August 1. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) (b) Date Account Titles and Explanation Aug. 1 Trading Investments Cash eTextbook and Media List of Accounts Debit Date Account Titles and Explanation Dec. 28 44900 Debit Credit 44900 Prepare the journal entry to record the receipt of the dividend on December 28. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Attempts: unlimited Credit

Answer rating: 100% (QA)

Solution Journal Entries Sweetwater Ltd Date 1... View the full answer