On March 1, 2018, Rawlins Company invests $25,000 in Ashton Company stock. Ashton pays Rawlins a $800 dividend on September 30, 2018. Rawlins sells the Ashton stock on November 30, 2018 for $23,500. Assume the investment is categorized as a short-term equity investment and that Rawlins does not have significant influence over Ashton.
Requirements:
1. Journalize the transactions for Rawlins' investment in Ashton's stock.
2. What was the net effect of the investment on Rawlins' net income for the year ended December 31, 2018.
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