Exercise $15-14$

Accounting for equity method investments

P$5$

Prepare journal entries to record the following transactions and events of Kodax Company.

Year $1$

Jan. $2$ Purchased $30,000$ shares of Grecco Co$.$ common stock for $$411,000$ cash. Grecco has $90,000$ shares of common stock outstanding, and its activities will be significantly influenced by Kodax.

Sep. $1$ Grecco declared and paid a cash dividend of $$1\mathrm{.}50$ per share.

Dec. $31$ Grecco announced that net income for the year is $$486,900.$

Exercise $15-14$

Accounting for equity method investments

P$5$

Prepare journal entries to record the following transactions and events of Kodax Company.

Year $1$

Jan. $2$ Purchased $30,000$ shares of Grecco Co$.$ common stock for $$411,000$ cash. Grecco has $90,000$ shares of common stock outstanding, and its activities will be significantly influenced by Kodax.

Sep. $1$ Grecco declared and paid a cash dividend of $51\mathrm{.}50$ per share.

Dec. $31$ Grecco announced that net income for the year is $$486,900.$

Year $2$

June $1$ Grecco declared and paid a cash dividend of $$2\mathrm{.}10$ per share.

Dec. $31$ Grecco announced that net income for the year is $$702,750.$

Dec. $31$ Kodax sold $3,000$ shares of Grecco for $$71,000$ cash.