Question
On January 1, 2019, Company C acquires 30 percent of the voting stock of Company D for $4,000,000. Company D reports net income of $1,000,000
On January 1, 2019, Company C acquires 30 percent of the voting stock of Company D for $4,000,000. Company D reports net income of $1,000,000 for 2019 and pays dividends of $200,000. Company C 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 2019.
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Advanced Accounting
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
