Question
Equity Investments: Less than 20% ownership On September 12, 2,500 shares of Denver Companys common stock are acquired at a price of $44 per share
Equity Investments: Less than 20% ownership
On September 12, 2,500 shares of Denver Companys common stock are acquired at a price of $44 per share plus a $125 brokerage commission. On October 15, an $0.80-per-share dividend was received on the Denver Company stock. On November 10, 1,000 shares of the Denver Company stock were sold for $39 per share less a $50 brokerage commission. At the end of the accounting period on December 31, the fair value of the remaining 1,500 shares of Denver Companys stock was $38 per share. Denver Company has 370,000 shares of common stock outstanding.
Journalize the entries for the original purchase, dividend, sale, and change in fair value under the fair value method. If an amount box does not require an entry, leave it blank.
| Sep. 12 | CashDividend RevenueInterest ReceivableInvestments-Denver Company StockNotes ReceivableInvestments-Denver Company Stock | Investments-Denver Company Stock | Investments-Denver Company Stock |
| CashDividend RevenueInterest ReceivableInvestments-Denver Company StockNotes ReceivableCash | Cash | Cash | |
| Oct. 15 | CashDividend ReceivableDividend RevenueInvestments-Denver Company StockNotes ReceivableCash | Cash | Cash |
| CashDividend ReceivableDividend RevenueInvestments-Denver Company StockNotes ReceivableDividend Revenue | Dividend Revenue | Dividend Revenue | |
| Nov. 10 | CashDividend RevenueGain on Sale of InvestmentsInvestments-Denver Company StockNotes ReceivableCash | Cash | Cash |
| Dividend RevenueDividends ReceivableGain on Sale of InvestmentsLoss on Sale of InvestmentsNotes ReceivableLoss on Sale of Investments | Loss on Sale of Investments | Loss on Sale of Investments | |
| CashDividend RevenueInvestments-Denver Company StockLoss on Sale of InvestmentsNotes ReceivableInvestments-Denver Company Stock | Investments-Denver Company Stock | Investments-Denver Company Stock | |
| Dec. 31 | CashDividend RevenueUnrealized Gain on Equity InvestmentsUnrealized Loss on Equity InvestmentsValuation Allowance for Equity InvestmentsUnrealized Gain on Equity Investments | Unrealized Gain on Equity Investments | Unrealized Gain on Equity Investments |
| CashDividend RevenueUnrealized Gain on Equity InvestmentsUnrealized Loss on Equity InvestmentsValuation Allowance for Equity InvestmentsValuation Allowance for Equity Investments | Valuation Allowance for Equity Investments | Valuation Allowance for Equity Investments |
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Intermediate Accounting Volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy
12th Canadian Edition
1119497043, 978-1119497042
