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On September 1, 2020, Mongolfier Co. acquired 155,000 shares (8%) of the outstanding shares of TRX Ltd. at a price of $20 per share. During
On September 1, 2020, Mongolfier Co. acquired 155,000 shares (8%) of the outstanding shares of TRX Ltd. at a price of $20 per share. During the last 4 months of 2020, TRX Ltd. accumulated net income of $1,500,000. Also, on December 31, 2020 TRX Ltd. declared and paid total dividends of $105,000 to its shareholders. On December 31, 2020, TRX Ltd.'s shares had a fair value of $16 per share. On January 5, 2020, Mongolfier Co. sold 15,000 of the TRX Ltd. Shares for $22 per share. Required: a) Record the journal entries related to this investment, that Mongolfier Co. will have to record on September 1, 2020 and December 31, 2020. b) What is the FV balance of the Investment in TRX Ltd. Account, at December 31, 2020? c) Record the journal entry related to the sale of the TRX Ltd. investment
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