MD-1 Recording Equity Method Securities Transactions On January 2, Ubuy.com paid

Question

MD-1 Recording Equity Method Securities Transactions On January 2, Ubuy.com paid $250,000 to acquire 20 percent (25,000 shares) of the common stock of E-Net Corporation. The accounting period for both companies ends December 31. July 2 E-Net declared and paid a cash dividend of $3 per share. Dec. 31 E-Net reported net income of $350,000. Required: Prepare the journal entries for the purchase on January 2 and for each of the above transactions that occurred during the year. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Explanation / Answer

2-Jan Investment in common stock of E-Net Corporation 250000               Cash 250000 2-Jul Cash 75000 =25000*3             Investment in common stock of E-Net Corporation 75000 31-Dec Investment in common stock of E-Net Corporation 70000 =350000*20%            Revenue from investment 70000

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.