An investment is considered as insignificant if the investment made by the investor is less than 20% in the investee company. The income on investments having insignificant influence is directly recorded in the income statement. To prepare: the adjusting entry to record the fair value adjustment for the equity securities.

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Chapter C, Problem 9E

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Concept Introduction:

An investment is considered as insignificant if the investment made by the investor is less than 20% in the investee company. The income on investments having insignificant influence is directly recorded in the income statement.

To prepare:the adjusting entry to record the fair value adjustment for the equity securities.

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