Assume that Echoing Green, featured in this chapter’s opener, makes an investment in Sustain Inc., a sustainability consulting firm. The company purchases 200 shares of Sustain stock for $15,000 cash plus a broker’s fee of $500 cash. Sustain has 500 shares of common stock outstanding, and Echoing Green will be able to significantly influence its policies. Required 1. Prepare the journal entry to record the investment in Sustain on January 1. 2. Sustain declares and pays a dividend of $1,000. Prepare the journal entry to record Echoing Green’s receipt of its share of the dividend on July 1. 3. Sustain reports net income of $5,000. Prepare the journal entry to record Echoing Green’s share of those earnings on December 31.
Assume that Echoing Green, featured in this chapter’s opener, makes an investment in Sustain
Inc., a sustainability consulting firm. The company purchases 200 shares of Sustain stock for $15,000
cash plus a broker’s fee of $500 cash. Sustain has 500 shares of common stock outstanding, and Echoing
Green will be able to significantly influence its policies. Required
1. Prepare the
2. Sustain declares and pays a dividend of $1,000. Prepare the journal entry to record Echoing Green’s
receipt of its share of the dividend on July 1.
3. Sustain reports net income of $5,000. Prepare the journal entry to record Echoing Green’s share of
those earnings on December 31.
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