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Required information [The following information applies to the questions displayed below.] Selk Steel Company, which began operations in Year 1, had the following transactions and
Required information [The following information applies to the questions displayed below.] Selk Steel Company, which began operations in Year 1, had the following transactions and events in its long-term investments. Year 1 January 5 Selk purchased 65,000 shares (20% of total) of Kildaire's common stock for $2,470,000. October 23 Kildaire declared and paid a cash dividend of $3.70 per share. December 31 Kildaire's net income is $45 per share. Year 2 for the year is $1,179,000, and the fair value of its stock at December 31 October 15 Kildaire declared and paid a cash dividend of $2.70 per share. December 31 Kildaire's net income for the year is $1,159,000, and the fair value of its stock at December 31 is $48 per share. Year 3 January 2 Selk sold 2% (equal to 1,300 shares) of its investment in Kildaire for $66,800 cash. Required: Prepare journal entries to record these transactions and events for Selk. Assume that Selk has a significant influence over Kildaire with its 20% share of stock.
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