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k declared a $4 -The shares' fair value at December 31 was $874,000. It ecause the shares do not trade in an active market. Rece tion 1ict oll dehit e ntrles before credit entries. ion 0lc

k declared a $4 -The shares' fair value at December 31 was $874,000. It ecause the shares do not trade in an active market. Rece tion 1ict oll dehit e ntrles before credit entries. ion 0lc

FINANCIAL ACCOUNTING
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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Current Attempt in Progress On January 1, Sipacore Corporation, a private company that reports under ASPE, purchased 20% of Hook Ltd. common shares for $834,000. At December 26, Hook declared a $42,000 dividend (Sipacore received its share of that dividend on the same day) and reported net income of $72,000. The shares' fair value at December 31 was $874,000. It has chosen to account for its investment in Hook Ltd. using the cost model because the shares do not trade in an active market. Record each of the transactions and any necessary adjusting journal entries under this assumption. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O for the amounts.)
Transcribed Image Text:Current Attempt in Progress On January 1, Sipacore Corporation, a private company that reports under ASPE, purchased 20% of Hook Ltd. common shares for $834,000. At December 26, Hook declared a $42,000 dividend (Sipacore received its share of that dividend on the same day) and reported net income of $72,000. The shares' fair value at December 31 was $874,000. It has chosen to account for its investment in Hook Ltd. using the cost model because the shares do not trade in an active market. Record each of the transactions and any necessary adjusting journal entries under this assumption. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O for the amounts.)
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