The following equity investment transactions were completed by Romero Company during a recent year: Apr. 10 Purchased 3,600 shares of Dixon Company for a price of $51 per share plus a brokerage commission of $95.
July 8 Received a quarterly dividend of $0.95 per share on the Dixon Company investment.
Sept. 10 Sold 2,000 shares for a price of $41 per share less a brokerage commission of $75.
Journalize the entries for these transactions.

The journal entries will look as follows:

Explanation:

Date        Particulars                                Dr ($)            Cr ($)              

Apr 10     Investments - Dixon (w.1.)      183,695

               Cash (w.1.)                                                     183.695

               (To record total value of investment in Dixon Company.)    

July 8      Cash                                           3,420

               Dividend revenue (w.2.)                                 3,420

               (To record dividend revenue from Dixon Company shares.)

Sept. 10  Cash (w.3.)                                  81,925

               Loss on investment sold (w.5.) 20,128

               Investments - Dixon (w.4.)                            102,053

               (To record sales of investment in Dixon Company.)              

Workings:

w.1. Total value of investment in Dixon Company = (3,600 * $51) + $95 = $183,695

w.2. Dividend revenue = 3,600 * $0.95 = $3,420

w.3. = Cash = (2,000 * 41) - $75 = $81,925

w.4. Value of investment in Dixon = ($183,695 / $3,600) * 2,000 = $102,053

w.5. Loss on sale of investment = w.3. - w.4. = $102,053 - $81,925 = $20,128