Sage Hill Company purchased 40,600 shares of common stock of Paxton Corporation for $1,044,000. During the year, PaxtonCorporation reported net income of $264,000 and paid dividends of $88,000.Assuming that the 40,600 shares represent a 20% interest in Paxton Corporation:1.Prepare the journal entry to record the investment in Paxton stock.2.Prepare any entries that Sage Hill Company should make in accounting for its investment in Paxton stock during the year.3. What is the balance of the Stock Investments account on Sage Hill Company's books at the end of the year? (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before creditentries.)No. Account Titles and ExplanationDebitCreditEquity Method1.2.(To record equity in Paxton's net income)(To record dividends received)3. Stock Investments account balance$

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Description: Sage Hill Company purchased 40,600 shares of common stock of Paxton Corporation for $1,044,000. During the year, PaxtonCorporation reported net income of $264,000 and paid dividends of $88,000.Assuming that the 40,600 shares represent a 20% interest

Under double entry system of bookkeeping one account is debited and other is credited. Assets and…

Business

Accounting

(Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) No. Account Titles and Explanation Debit Credit Equity Method 1. (To record equity in Paxton's net income) (To record dividends received) 2.

(Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) No. Account Titles and Explanation Debit Credit Equity Method 1. (To record equity in Paxton's net income) (To record dividends received) 2.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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