Question 28 Company P purchased 70% stock in Company S on Jan 1, 20X1 for $200,000. For the year 20X1, Company S reported the net income of $100,000 and paid dividends of $40,000. At year end, investment account in the books of Company P had a fair market value of $225,000. Under the equity method, the balance in the investment account in the books of P will be reported at

Question 29 The book value of owners equity of Company S was $100,000 on Jan 1, 20X8. On this date Company P acquired 75% shares of Company S at book value by issuing bonds with a par value and fair value of $75,000. In recording the journal entry of acquisition,