Early in its 2020 fiscal year (December 31 year end), Hayes Company purchased 10,000 Kenyon Corporation common
Question:
Early in its 2020 fiscal year (December 31 year end), Hayes Company purchased 10,000 Kenyon Corporation common shares for $26.18 per share, plus $1,800 in brokerage commissions. These securities were accounted for at FV-OCI (with no recycling), and transaction costs were capitalized. In September, Kenyon declared and paid a dividend of $1.02 per share, and on December 31, 2020, the fair value of these shares was $271,500. On April 13, 2021, Hayes sold all the Kenyon shares at a price of $28.10 each, incurring $1,925 in brokerage commissions on the sale. Prepare the entries to record
(a) The purchase of the Kenyon shares,
(b) The receipt of the dividend,
(c) The fair value adjustment at December 31, 2020,
(d) All entries associated with the disposal of the investment on April 13, 2021.
The company reclassifies any gains or losses to Retained Earnings upon disposition of the securities.
CorporationA 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...
Step by Step Answer:
a FVOCI Investments 1 263600 Cash 263600 1 10000 X 2618 1800 b ...View the full answer
Intermediate Accounting Volume 1
ISBN: 978-1119496496
12th Canadian edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy
