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Williams Corp. purchased 20% of Eric Corps common stock on January 1, 20X8 for $300,000, which was the book value and fair value of the
Williams Corp. purchased 20% of Eric Corps common stock on January 1, 20X8 for $300,000, which was the book value and fair value of the net assets for its share of Eric Corp. For 20x8, Eric Corp. had net income of $60,000 and paid dividends of $10,000. On Dec 31, 20X8 the stock was worth $333,000. Write the proper journal entries on the books of Williams Corp. relating to its investment in Erik Corp. for 20x8, assuming it is accounted for it using the Fair Value Method. If no journal entry is needed, simply type "No journal entry is needed." Carefully label each answer as being for Part A, Part B, Part C, or Part D: Part A. Write the journal entry Williams Corp. needs to make related its investment in Erik Corp. Part B. Write the journal entry Williams Corp. needs to make related to the dividend paid by Erik Corp. Part C. Write the journal entry Williams Corp. needs to make related to the net income of Erik Corp. Part D. Write the journal entry Williams Corp. needs to make in order to account for the change in value of Erik Corp
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