On April 1, 2018, Morton Company invests $50,000 in Johnson Company stock. Johnson pays Morton a $2,000 dividend on November 30, 2018. Morton sells the Johnson stock on December 31, 2018 for $54,500. Assume the investment is categorized as a short-term equity investment and that Morton does not have significant influence over Johnson.
Requirements:
1. Journalize the transactions for Morton's investment in Johnson's stock.
2. What was the net effect of the investment on Morton's net income for the year ended December 31, 2018.
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