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On January 1, 2021, Pearl Corporation acquired 150,000 common shares of Sapphire Company for $20 each. At the time, Sapphire had 1,000,000 common shares outstanding.
On January 1, 2021, Pearl Corporation acquired 150,000 common shares of Sapphire Company for $20 each. At the time, Sapphire had 1,000,000 common shares outstanding. The investment was classified as FV-NI. During 2021, Sapphire reported net income of $225,000 and declared and paid dividends of $16,000. At the end of 2021, the fair value of Sapphire's shares was $23 per share. d) Prepare the journal entries on the books of Pearl Corporation for the investment in Sapphire for the 2024 fiscal year. (6 Marks) On January 1, 2025, Pearl Corporation sold 32,500 shares of Sapphire Company for $27 per share. On the date of the sale, Pearl showed a balance of $13,000 in its contributed surplus account
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