Question
Nelson company acquired a 30% interest in Carter corporation and concludes that it has significant influence over Carter. The book value of Carters stockholders equity
Nelson company acquired a 30% interest in Carter corporation and concludes that it has significant influence over Carter. The book value of Carters stockholders equity is $1,000,000 and Nelson pays $450,000 for the investment. An excess of purchase price over book value was attributable to an unrecorded customer list worth $500,000 with a useful life of 10 years. After the acquisition, Carter reported net income of $250,000 and paid Nelson a dividends of $11,000. At the end of the year, Nelson sells the investment for $530,000.
Prepare all entries related to the investment during the year
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