On July 1, 2021, Clearwater Inc. purchased 5,600 shares of the outstanding common stock of Mountain Corporation at a cost of $136,000. Mountain had 28,000 shares of outstanding common stock. The total book value and total fair value of Mountain's individual net assets on July 1, 2021, are both $680,000. The total fair value of the 28,000 shares of Mountain's common stock on December 31, 2021, is $750,000. Both companies have a January through December fiscal year. The following data pertains to Mountain Corporation during 2021: Dividends declared and paid, January 1-June 30 Dividends declared and paid, July 1-December 31 $11,800 $11,800 Net income, January 1June 30 Net income, July 1December 31 $13,800 $17,800 Required: 1. Prepare the necessary entries for 2021 under the equity method (other than for the purchase). 2. Prepare any necessary entries for 2021 (other than for the purchase) that would be required if the securities were accounted for under the fair value through net income method. Required 1 Required 2 Prepare the necessary entries for 2021 under the equity method (other than for the purchase). (If no entry is required transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the entry for investment revenue under the equity method. Note: Enter debits before credits. General Journal Debit Credit Transaction 2 Record entry Clear entry View general Journal Required 1 Required 2 Prepare the necessary entries for 2021 under the equity method (other than for the purchase). (If no entry is requir transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the unrealized gain or loss for securities available for sale. Note: Enter debits before credits. General Journal Debit Credit Transaction 3 Record entry Clear entry View general Journal Required 1 Required 2 Prepare any necessary entries for 2021 (other than for the purchase) that would be required if the securitie the fair value through net income method. (If no entry is required for a transaction/event, select "No journ account field.) View transaction list Journal entry worksheet Record the entry for cash dividend received under the equity method. Note: Enter debits before credits. General Journal Debit Credit Transaction 1 Record entry Clear entry View general Journal Required 1 Required 2 Prepare any necessary entries for 2021 (other than for the purchase) that would be required if the securities w the fair value through net income method. (If no entry is required for a transaction/event, select "No journal e account field.) View transaction list Journal entry worksheet 1 N 3 3 > Record the entry for cash dividend received for securities available for sale. Note: Enter debits before credits. General Journal Debit Credit Transaction 2 Record entry Clear entry View general Journal Required 1 Required 2 Prepare any necessary entries for 2021 (other than for the purchase) that would be required if the securitie the fair value through net income method. (If no entry is required for a transaction/event, select "No journa account field.) View transaction list Journal entry worksheet Record the unrealized gain or loss for securities available for sale. Note: Enter debits before credits. General Journal Debit Credit Transaction 3 Record entry Clear entry View general Journal Prey 1 of 6 HH Next >
