Reference no: EM132096340

Question - Johnson Inc. had the following transactions for January:

1. Purchased marketable securities in Smith Company for $100,000 cash.

2. Purchased 1,000 shares of Parker Co. for $55,000 as a long term investment. Parker has 10,000 outstanding shares issued and outstanding).

3. Purchased 10,000 shares of Drew Co. for $176,000 as a long term investment. Drew had 40,000 shares issued and outstanding.

Johnson Inc. received the following dividends:

4. $1.50 per share from Parker Co.

5. $3.00 per share from Drew Co.

Additional transactions include:

6. Parker Co. reported a net income of $127,000, and Drew Co. reported a net income of $600,000.

7. After dividends were received, we sold the 1,000 shares of Parker Co. for $60,000 cash.

Instructions: Prepare the journal entries to record the above transactions. Remember to use the space bar to indent the credits. Number the journal entries as indicated above.