All State Services,Inc

question 177

Multiple Choice

All State Services,Inc.acquired 100,000 shares of Omega Metals,Inc.on January 1,2018.Omega pays a cash dividend of $0.25 per share on March 2,2019.With the current investment,All State Services,Inc.holds 8% of Omega.In the journal entry on March 2,2019,________.

• A) Equity Investments is credited
• B) Dividend Revenue is credited
• C) Equity Investments is debited
• D) Cash Dividends is credited

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Definitions:

Compounded Quarterly

Interest calculation method where interest is added to the principal every three months, affecting the total interest earned or paid.

Compounded Monthly

A financial term indicating the interest on a deposit or loan is calculated and added to the principal amount each month; it emphasizes the frequent interest capitalization as opposed to annual.

Investor

A person or organization that invests money anticipating to gain financial profits.

Base Metal Mining

The extraction of non-precious metals such as copper, zinc, nickel, and lead from the earth.