Question
Turner Company purchased 35% of the outstanding stock of ICA Company for $10,900,000 on January 2, 2018. Turner elects the fair value option to account
Turner Company purchased 35% of the outstanding stock of ICA Company for $10,900,000 on January 2, 2018. Turner elects the fair value option to account for the investment. During 2018, ICA earns $840,000 of income and on December 30 pays a dividend of $580,000. On December 31, 2018, the fair value of Turners investment has increased to $13,300,000. Prepare the journal entries in the books of Turner to account for this investment during 2018. Assume that Turner will account for the investment for a trading security. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
1.Record the investment.
2.Record the investment revenuerealized
3.Record the fair value adjustment.
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