Assume that Echoing Green, featured in this chapter's opener, makes an investment in Sustain Inc., a sustainability

Question:

Assume that Echoing Green, featured in this chapter's opener, makes an investment in Sustain Inc., a sustainability consulting firm. The company purchases 200 shares of Sustain stock for $15,000 cash plus a broker's fee of $500 cash. Sustain has 500 shares of outstanding, and Echoing Green will be able to significantly influence its policies.
Required
1. Prepare the journal entry to record the investment in Sustain on January 1.
2. Sustain declares and pays a of $1,000. Prepare the journal entry to record Echoing Green's receipt of its share of the on July 1.
3. Sustain reports net income of $5,000. Prepare the journal entry to record Echoing Green's share of those earnings on December 31.
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... 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...