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On January 4, Year 1, Barber Company purchased 6,500 shares of Convell Company for $79,600. Convell Company has a total of 32,500 shares of common
On January 4, Year 1, Barber Company purchased 6,500 shares of Convell Company for $79,600. Convell Company has a total of 32,500 shares of common stock outstanding and it is presumed the Barber Company will have a significant influence over Convell. During each of the next two years, Convell declared and paid cash dividends of $0.75 per share, and its net income was $81,000 and $76,000 for Year 1 and Year 2, respectively. The January 2 Year 3, entry to record Barber's sale of 3,900 shares of Convell Company stock, which represents 60% of Barber's total investment, for $52,650 cash, should be: Multiple Choice O Debit Cash $52,650; debit Loss on Sale of Investment $8,100; credit Equity Method Investments $60,750. O O Debit Cash $52,650, debit Loss on Sale of Stock Investment $4,890; credit Equity Method Investments 547,760. O O Debit Cash $52,650, credit Gain on Sale of Stock Investment $9.750: credit Equity Method Investments $62.400. O O Debit Cash $52.650, debit lows on Sale of Stock Investment $26,950, credit Equity Method Investments $79,600
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