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Banks Corporation purchased 400 shares of Herman Inc. common stock as an available-for-sale investment for $13,200. During the year, Herman paid a cash dividend of
Banks Corporation purchased 400 shares of Herman Inc. common stock as an available-for-sale investment for $13,200. During the year, Herman paid a cash dividend of $3.25 per share. At year-end, Herman stock was selling for $34.50 per share. Prepare Bankss journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment.
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