On January 3, 2019, Martin Company purchased for $500,000 cash a 10% interest in Renner Corp. The fair value of Martin's investment in Renner securities is as follows: December 31, 2019, $560,000, and December 31, 2020, $515,000. On January 2, 2021, Martin purchased an additional 30% of Renner's stock for $1,545,000 cash. During 2019, 2020, and 2021, the following occurred. Renner Net Income Dividends Paid by Renner to Martin 2019 $350,000 $15,000 2020 450,000 20,000 2021 550,000 70,000 Instructions On the books of Martin Company, prepare all journal entries in 2019, 2020, and 2021 that relate to its investment in Renner Corp., reflecting the data above and a change from the fair value method to the equity method.
On January 3, 2019, Martin Company purchased for $500,000 cash a 10% interest in Renner Corp. The fair value of Martin's investment in Renner securities is as follows: December 31, 2019, $560,000, and December 31, 2020, $515,000. On January 2, 2021, Martin purchased an additional 30% of Renner's stock for $1,545,000 cash. During 2019, 2020, and 2021, the following occurred. Renner Net Income Dividends Paid by Renner to Martin 2019 $350,000 $15,000 2020 450,000 20,000 2021 550,000 70,000 Instructions On the books of Martin Company, prepare all journal entries in 2019, 2020, and 2021 that relate to its investment in Renner Corp., reflecting the data above and a change from the fair value method to the equity method.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
On January 3, 2019, Martin Company purchased for $500,000 cash a 10% interest in Renner Corp. The fair value of Martin's investment in Renner securities is as follows: December 31, 2019, $560,000, and December 31, 2020, $515,000. On January 2, 2021, Martin purchased an additional 30% of Renner's stock for $1,545,000 cash.
During 2019, 2020, and 2021, the following occurred.
|
|
Renner Net Income |
Dividends Paid by Renner to Martin |
|
2019
|
$350,000
|
$15,000
|
|
2020
|
450,000
|
20,000
|
|
2021
|
550,000
|
70,000
|
Instructions
On the books of Martin Company, prepare all
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