Fairbanks Corporation purchased 400 ordinary shares of Sherman Inc as a trading investment for $13,200 During the year, Sherman paid a cash dividend of $3 25 per share At year end, Sherman shares were selling for $34 50 per share Prepare Fairbankss journal entries to record (a) The purchase of the ...

a Equity Investments 13200 Cash 13200 ...

Fairbanks Corporation purchased 400 ordinary shares of Sherman Inc. as a trading investment for $13,200. During the

Question:

Fairbanks purchased 400 ordinary shares of Sherman Inc. as a trading investment for $13,200. During the year, Sherman paid a cash of $3.25 per share. At year-end, Sherman shares were selling for $34.50 per share. Prepare Fairbanks’s journal entries to record
(a) The purchase of the investment,
(b) The dividends received, and
(c) The fair value adjustment.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...