Question
On January 1, 2017, Company JJ acquires 25 percent of the voting stock of Company KK for $3,000,000. Company KK reports net income of $1,200,000
On January 1, 2017, Company JJ acquires 25 percent of the voting stock of Company KK for $3,000,000. Company KK reports net income of $1,200,000 for 2017 and pays dividends of $300,000. Company JJ uses the equity method to account for the investment.
Prepare the journal entries to record the acquisition, recognize the share of net income, and receive dividends in 2017.
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Advanced Accounting
Authors: Paul M. Fischer, William J. Tayler, Rita H. Cheng
11th edition
538480289, 978-0538480284
