On January 1, 2018, Bryant, Inc. decides to invest in 3,750 shares of Farrier stock when the

Question:

On January 1, 2018, Bryant, Inc. decides to invest in 3,750 shares of Farrier stock when the stock is selling for $16 per share. On August 1, 2018, Farrier paid a $0.70 per share cash to stockholders. On December 31, 2018, Farrier reports net income of $50,000 for 2018. Assume Farrier has 15,000 shares of voting stock outstanding during 2018 and Bryant has significant influence over Farrier.
Requirements
1. Identify what type of investment the Farrier stock is for Bryant.
2. Journalize the transactions related to Bryant's investment in the Farrier stock during 2018.
3. In what category and at what value would Bryant's report the investment on the December 31, 2018, balance sheet?
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...