Required: Prepare the journal entries for Fisher for the years of 2023 and 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Required: Prepare the journal entries for Fisher for the years of 2023 and 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
A-3
Transcribed Image Text:ces
On January 1, 2023, Fisher Corporation purchased 40 percent (70,000 shares) of the common stock of Bowden, Incorporated, for
$974,000 in cash and began to use the equity method for the investment. The price paid represented a $54,000 payment in excess of
the book value of Fisher's share of Bowden's underlying net assets. Fisher was willing to make this extra payment because of a
recently developed patent held by Bowden with a 15-year remaining life. All other assets were considered appropriately valued on
Bowden's books.
Bowden declares and pays a $96,000 cash dividend to its stockholders each year on September 15. Bowden reported net income of
$388,000 in 2023 and $360,000 in 2024. Each income figure was earned evenly throughout its respective years.
On July 1, 2024, Fisher sold 10 percent (17,500 shares) of Bowden's outstanding shares for $322,000 in cash. Although it sold this
interest, Fisher maintained the ability to significantly influence Bowden's decision-making process.
Required:
Prepare the journal entries for Fisher for the years of 2023 and 2024.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
View transaction list View journal entry worksheet
No
1
2
3
4
5
6
Date
01/01/2023 Investment in Bowden
Cash
09/15/2023
12/31/2023
12/31/2023
07/01/2024
07/01/2024
Cash
Investment in Bowden
Investment in Bowden
Equity in investee income
Equity in investee income
Investment in Bowden
Investment in Bowden
Equity in investee income
Equity in investee income
Investment in Bowden
General Journal
Debit
974,000
38,400
155,200
3,600
72,000
2,200
Credit
974,000
38,400
155,200
3,600
72,000
2,200
Ⓒ
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