Pls use given suggested entries. I need help w yellow highligted entries thanks
Dr. Recording Entries for Equity Investment: Equity Method On January 1, 2020, Allen Corporation purchased 30% of the 48,000 outstanding common shares of Towne Corporation at $15 per share as a long-term investment. On the date of purchase, the book value and the fair value of the net assets of Towne Corporation were equal. During the year, Towne Corporation reported net income of $38,400. Towne Corporation declared and paid cash dividends of $12,800 on December 30, 2020, to shareholders on record. As of December 31, 2020, common shares of Towne Corporation were trading at $20 per share. a. Record the entries in 2020 assuming that Allen Corporation had significant influence over Towne Corporation. Date Account Name Cr. Jan. 1, 2020 Investment in TS Cash To record investment purchase. Dec. 30, 2020 Cash Investment in TS To record receipt of dividends. Dec. 31, 2020 Investment in TS Investment Income 0 To record proportionate share of investee's net income. 0 0 0 0 0 0 0 0 0 0 0 b. Indicate the effects of this investment on the 2020 income statement and year-end balance sheet. Note: Use a negative sign to indicate a loss. Income Statement 2020 Other Revenues and Gains Investment Income 0 Balance Sheet, December 31 2020 Assets Investment in TS $ 0 Check Dr. Cr. 0 0 0 0 Recording Entries for Equity Investment: Equity Method On January 1, 2020, Allen Corporation purchased 30% of the 48,000 outstanding common shares of Towne Corporation at $15 per share as a long-term investment. On the date of purchase, the book value and the fair value of the net assets of Towne Corporation were equal. During the year, Towne Corporation reported net income of $38,400. Towne Corporation declared and paid cash dividends of $12,800 on December 30, 2020, to shareholders on record. As of December 31, 2020, common shares of Towne Corporation were trading at $20 per share. a. Record the entries in 2020 assuming that Allen Corporation had significant influence over Towne Corporation. Date Account Name Jan. 1, 2020 Investment in TS Cash Cash Dec 30, 2020 Interest Receivable Investment in TS Fair Value Adjustment--TS Investment in AFS Securities Dec 31, 2020 In Fair Value Adjustment--AFS Investment in HTM Securities Investment in Stock Fair Value Adjustment--Equity Securities Fair Value Adjustment--Fair Value Option b. Indicate the Allowance for Credit Losses tatement and year-end balance sheet. Note: Use a ne Accumulated Other Comprehensive Income Ir Unrealized Gain or Loss-OCI Other Revenues Unrealized Gain or Loss--Income Investment In Dividend Revenue 0 O O 0 0 0 0 0 possible entry names Balan interest Revenue Investment Income Assets Loss on Impairment Investment in Recovery of Loss on Impairment Loss on Sale of Investment Check
