Equity Investment

01/02/18 ABC Co. purchased 5400 shares (25%) of CRM Company for $13,500. ABC has significan influence over CRM Company. In July, 2018 CRM declared and paid a $.50 cents per share dividend on the CRM stock. For the year ended 12/31/18 CRM reported net income of $127,000 . At 12/31/18, the market price of CRM stock rose to $3.25 per share.

REQUIRED:1) Record the journal entries for the 2018 transactions.

2) What is the balance in ABC Co. investment in CRM Company?

3) At 12/31/18, ABC sold the CRM investment for $41,500, record the

journal entry for the sale.