1. Investment in Equity Securities

On January 1, 2020, Smart Company purchased 80,000 shares ofRemington Company's $10 par common stock for $46 per share. During 2020, Remington paid total dividends of $600,000 and reported net income of $900,000. Remington stock was trading for $48 per share on December 31, 2020. During 2021, Remington paid total dividends of $70,000 and reported net loss of $200,000. Remington stock was trading for $38 per share on December 31, 2021.

Instructions:

Remington company books of a/c

a. Prepare all necessary journal entries for 2020 and 2021 ifRemington has 800,000 shares of common stock outstanding.

b. Prepare all necessary journal entries for 2020 and 2021 ifRemington has 200,000 shares of common stock outstanding.