Question
On January 1, 2021 Seely Company purchased 4,000 shares of common stock of Otto Corporation as a long-term investment for $1,000. On December 1, 2021
On January 1, 2021 Seely Company purchased 4,000 shares of common stock of Otto
Corporation as a long-term investment for $1,000.
On December 1, 2021 Otto Corporation reported net income of $300 and paid dividends of $100.
On December 31, 2021 fair market value of this portfolio is $1,300.
Instructions: Do not forget to write "no journal entry" when applicable as well as identify if investment is
AFS or trading, etc. and where unrealized holding gain or loss is reported.
(a)
Assuming that the 4,000 shares represent a 10% interest in Otto Corporation prepare the journal entry to record the investment in Otto stock:
(b)
Assuming that the 4,000 shares represent a 25% interest in Otto Corporation prepare the journal entry to record the investment in Otto stock:
On January 1, 2021 Seely Company purchased 4,000 shares of common stock of Otto
Corporation as a long-term investment for $1,000.
On December 1, 2021 Otto Corporation reported net income of $300 and paid dividends of $100.
On December 31, 2021 fair market value of this portfolio is $1,300.
Instructions: Do not forget to write "no journal entry" when applicable as well as identify if investment is
AFS or trading, etc. and where unrealized holding gain or loss is reported.
(a)
Assuming that the 4,000 shares represent a 10% interest in Otto Corporation prepare the journal entry to record the investment in Otto stock:
(b)
Assuming that the 4,000 shares represent a 25% interest in Otto Corporation prepare the journal entry to record the investment in Otto stock:
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