Question
21. A partial list of investment activities for Honda Inc. during YR01 and YR02 appears below. Prepare formal journal entries to record these events and
21. A partial list of investment activities for Honda Inc. during YR01 and YR02 appears below.
-
Prepare formal journal entries to record these events and any necessary adjusting journal entries in YR01 and YR02. For this problem calculate journal entry amounts to the nearest dollar.
April 1, YR02 | Purchased 120 common shares of Ford Co. common stock. Paid $20 per share and a brokers fee of $60. Ford Co. currently has 400 common shares outstanding, and this purchase gives Honda the ability to influence the operating activities of Ford Co. At the purchase date, the book value per common share for Ford Co. is $14.50. The difference between price paid and book value per common share for the Ford Co. stock is related to the following: (1) 50% of the difference relates to equipment with a remaining life of 5 years, (2) 25% relates to land, and (3) 25% relates to internally developed goodwill. |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started