Problem: On October 1, 2008, Chicago Corp. purchases 1,000 shares of the preferred stock of Denver Corp. for $40 per share. In addition, Chicago pays another $1,000 in commissions. On October 20, 2008, Denver delivers and pays a dividend of $1 per share. Chicago sells the stock on November 5, 2008, at a price of $45 per share.
Required:
Prepare all necessary journal entries on Chicago's books in connection with its investment, beginning with the purchase of the preferred stock on October 1, 2008; the dividend received on October 20, 2008, and the sale on November 5, 2008.