Prepare journal entries for the transactions below relating to an Equity Investment accounted for using the equity method. a. An investor purchases 14,400 common shares of an investee at $16 per share; the shares represent 25% ownership in the investee and the investor concludes that it can exert significant influence over the investee. b. The investee reports net income of $172,800. c. The investor receives a cash dividend of $1.50 per common share from the investee. d. The investor sells all 14,400 common shares of the investee for $260,280. General Journal Ref. Description Debit Credit a. b. C. d. Equity investment
Prepare journal entries for the transactions below relating to an Equity Investment accounted for using the equity method. a. An investor purchases 14,400 common shares of an investee at $16 per share; the shares represent 25% ownership in the investee and the investor concludes that it can exert significant influence over the investee. b. The investee reports net income of $172,800. c. The investor receives a cash dividend of $1.50 per common share from the investee. d. The investor sells all 14,400 common shares of the investee for $260,280. General Journal Ref. Description Debit Credit a. b. C. d. Equity investment
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Equity method journal entries (price equals book value)
Prepare journal entries for the transactions below relating to an Equity Investment accounted for using the equity method.
a. An investor purchases 14,400 common shares of an investee at $16 per share; the shares represent 25% ownership in the investee and the investor concludes that it can exert significant influence over the
investee.
b. The investee reports net income of $172,800.
c. The investor receives a cash dividend of $1.50 per common share from the investee.
d. The investor sells all 14,400 common shares of the investee for $260,280.
General Journal
Ref.
Description
Debit
Credit
a.
b.
C.
d.
Equity investment](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8fcdf5c0-6ce9-4e53-b226-fabef8995b6f%2Fe0dcf581-62d9-41e8-a410-6149534051c1%2Fn03n1cq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Equity method journal entries (price equals book value)
Prepare journal entries for the transactions below relating to an Equity Investment accounted for using the equity method.
a. An investor purchases 14,400 common shares of an investee at $16 per share; the shares represent 25% ownership in the investee and the investor concludes that it can exert significant influence over the
investee.
b. The investee reports net income of $172,800.
c. The investor receives a cash dividend of $1.50 per common share from the investee.
d. The investor sells all 14,400 common shares of the investee for $260,280.
General Journal
Ref.
Description
Debit
Credit
a.
b.
C.
d.
Equity investment
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education