Additional Exercise 12 Crespo Company purchased 42,000 shares of common stock of the Paive Corporation as an investment for $1,000,000. During the year, Paive Corporation reported net income of $400,000 and paid dividends of $100,000.

Assuming that the 42,000 shares represent a 15% interest in Paive Corporation: (1) Prepare the journal entry to record the investment in Paive stock. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit

(2) Prepare any entries that Crespo Company should make in accounting for its investment in Paive stock during the year. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit

(3) What is the balance of the Stock Investments account on Crespo Company's books at the end of the year?

Balance at the end of the year

$

SHOW LIST OF ACCOUNTS

Assuming that the 42,000 shares represent a 25% interest in Paive Corporation: (1) Prepare the journal entry to record the investment in Paive stock. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit

(2) Prepare any entries that Crespo Company should make in accounting for its investment in Paive stock during the year. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit
(To record 25% equity in Paive net income)
(To record dividends received)

(3) What is the balance of the Stock Investments account on Crespo Company's books at the end of the year?

Balance at the end of the year

$