Following are selected transactions that affected NoQWERTY during 2009. On January 1, NoQWERTY paid $300,000 for

Question:

Following are selected transactions that affected NoQWERTY during 2009.
• On January 1, NoQWERTY paid $300,000 for 15,000 shares of LQTM, Inc.
• On January 1, LQTM, Inc. declared and paid a $0.32 per share on its stock to all shareholders.
• On July 1, WYWH Corp. issued 300, $1,000, 5 percent, ten-year bonds for $320,000. NoQWERTY purchased 150 of the WYWH bonds on issuance.
• On December 31, WYWH paid semiannual interest to all bondholders.
• On December 31, LQTM reported a net loss of $9,000.
Required:
(a) Record the journal entries for the listed transactions related to NoQWERTY, assuming that:
(1) NoQWERTY owns 5 percent of LQTM, Inc.
(2) NoQWERTY owns 35 percent of LQTM, Inc.
(3) NoQWERTY owns 90 percent of LQTM, Inc.
(b) Describe NoQWERTY’s year-end procedures related to LQTM, Inc. under each assumption from part (a).
(c) Record the entry for NoQWERTY’s investment in the WYWH bonds and the subsequent receipt of the annual interest.
(d) Under what circumstance(s) would NoQWERTY show minority interest on its ﬁnancial statements? Explain. Is there an instance in which NoQWERTY would not show a minority interest? If so, explain.
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...