Questions: June 1 Grecco declared and paid a cash dividend of 3.00 per share. December 31 Grecco announced that net income for the year is 737,900. December 31 Kodax sold 12,000 shares of Grecco for 98,000 cash. Prepare journal entries to record the above transactions and events of Kodax Company. Note: Do not round intermediate calculations and round your final answers to the nearest dollar amount.

To prepare the journal entries for Kodax Company based on the transactions and events related to Grecco, we need to consider the impact of each event on Kodax's financial records. Here are the steps and journal entries:

1. June 1: Grecco declared and paid a cash dividend of $3.00 per share.

   Since Kodax owns shares in Grecco, it will receive dividends based on the number of shares it holds. However, the number of shares owned by Kodax is not provided in the question. Assuming Kodax owns "X" shares, the dividend received would be \( X \times 3.00 \).

   Journal Entry: \[ \begin{array}{|c|c|c|c|} \hline \text{Date} & \text{General Journal} & \text{Debit} & \text{Credit} \\ \hline \text{June 1, Year 2} & \text{Cash} & X \times 3.00 & \\ \hline & \text{Dividend Income} & & X \times 3.00 \\ \hline \end{array} \]

2. December 31: Grecco announced that net income for the year is $737,900.

   This information is relevant for Grecco's financial statements but does not directly affect Kodax's journal entries unless Kodax uses the equity method for accounting for its investment in Grecco. Without additional information, we assume no entry is needed for Kodax.

3. December 31: Kodax sold 12,000 shares of Grecco for $98,000 cash.

   To record the sale of shares, we need to know the cost basis of the shares sold. Without this information, we can only record the cash received and recognize a gain or loss based on the difference between the sale proceeds and the cost basis.

   Assuming the cost basis of the 12,000 shares is "Y," the gain or loss is calculated as \( 98,000 - Y \).

   Journal Entry: \[ \begin{array}{|c|c|c|c|} \hline \text{Date} & \text{General Journal} & \text{Debit} & \text{Credit} \\ \hline \text{December 31, Year 2} & \text{Cash} & 98,000 & \\ \hline & \text{Investment in Grecco} & & Y \\ \hline & \text{Gain on Sale of Investment} & & 98,000 - Y \\ \hline \end{array} \]

   If the cost basis "Y" is greater than $98,000, the entry would reflect a loss instead of a gain.

In summary, the journal entries for Kodax Company depend on the number of shares owned and the cost basis of the shares sold. The dividend income and the gain or loss on the sale of shares are the primary considerations for Kodax's financial records.