Pronghorn Corporation purchased for $ 322,000 a 30% interest in Murphy, Inc. This investment enables Pronghorn to exert significant influence over Murphy. During the year, Murphy earned net income of $ 183,000 and paid dividends of $ 60,000.Prepare Pronghorn’s journal entries related to this investment. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)Account Titles and ExplanationDebitCreditenter an account title to record the purchaseenter a debit amountenter a credit amountenter an account title to record the purchaseenter a debit amountenter a credit amount(To record the purchase.) enter an account title to record the net incomeenter a debit amountenter a credit amountenter an account title to record the net incomeenter a debit amountenter a credit amount(To record the net income.) enter an account title to record the dividendenter a debit amountenter a credit amountenter an account title to record the dividendenter a debit amountenter a credit amount(To record the dividend.)

Share in ividend = total dividend paid x interest % = 60,000 x 30% = $18,000

Answered: Pronghorn Corporation purchased for $…

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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Pronghorn Corporation purchased for $ 322,000 a 30% interest in Murphy, Inc. This investment enables Pronghorn to exert significant influence over Murphy. During the year, Murphy earned net income of $ 183,000 and paid dividends of $ 60,000.

Prepare Pronghorn’s journal entries related to this investment. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit
enter an account title to record the purchase	enter a debit amount	enter a credit amount
enter an account title to record the purchase	enter a debit amount	enter a credit amount
(To record the purchase.)
enter an account title to record the net income	enter a debit amount	enter a credit amount
enter an account title to record the net income	enter a debit amount	enter a credit amount
(To record the net income.)
enter an account title to record the dividend	enter a debit amount	enter a credit amount
enter an account title to record the dividend	enter a debit amount	enter a credit amount
(To record the dividend.)