Question

On July 1, Jerome received $200 in dividends from Melina Corporation on which it owns less than 20% of the voting stock. Complete the necessary journal entry selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

Answer 1

Answer:

Journal Entry

July 1,

Debit      Cash / Bank                            $200

Credit     Dividend Received (Income) $200

Explanation:

All the investments below 50% have non controlling interest in the company in which they invested. Such a investment is recorded as a fixed asset if investment is made for long term. Dividedn received fro here will be considered as the Dividend income which is recorded and shown on the Income statement with other Income.