Vaughn Joseph Inc. acquired 20% of the outstanding common stock of Theresa Carla Vista Inc. on December 31, 2025. The purchase price was $1,294,800 for 49,800 shares. Carla Vista Inc. declared and paid an $0.75 per share cash dividend on June 30 and on December 31, 2026. Carla Vista reported net income of $764,000 for 2026. The fair value of Carla Vista's stock was $29 per share at December 31, 2026. Assume that the security is a trading security. (a) Prepare the journal entries for Vaughn Joseph Inc. for 2025 and 2026, assuming that Joseph cannot exercise significant influence over Carla Vista. (List all debit entries before credit entries. 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 O for the amounts. Record journal entries in the order presented in the problem.)

Vaughn Joseph Inc. acquired 20% of the outstanding common stock of Theresa Carla Vista Inc. on December 31, 2025. The purchase price was $1,294,800 for 49,800 shares. Carla Vista Inc. declared and paid an $0.75 per share cash dividend on June 30 and on December 31, 2026. Carla Vista reported net income of $764,000 for 2026. The fair value of Carla Vista's stock was $29 per share at December 31, 2026. Assume that the security is a trading security. (a) Prepare the journal entries for Vaughn Joseph Inc. for 2025 and 2026, assuming that Joseph cannot exercise significant influence over Carla Vista. (List all debit entries before credit entries. 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 O for the amounts. Record journal entries in the order presented in the problem.)

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 25E

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