FINANCIAL ACCT.FUND.(LOOSELEAF)
FINANCIAL ACCT.FUND.(LOOSELEAF)
7th Edition
ISBN: 9781260482867
Author: Wild
Publisher: MCG
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Chapter C, Problem 6PSA
To determine

Introduction:

Equity method of recording investment:The equity method of recording the investment is used where the stock purchased is more than 20% of total stockholding but lesser than 50% or the investor gets the significant influence in the investee corporation. Where the investment does not hold the above two conditions, then cost method of accounting of investment is applied.

Journal entries for the transactions of investments.

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