Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Your answer is partially correct. Try again. Cheyenne Corporation purchased 420 shares of Sherman Inc. common stock for $12,900 (Cheyenne does not have significant influence).
Your answer is partially correct. Try again. Cheyenne Corporation purchased 420 shares of Sherman Inc. common stock for $12,900 (Cheyenne does not have significant influence). During the year, Sherman paid a cash dividend of $3.25 per share. At year-end, Sherman stock was selling for $37.00 per share. Prepare Cheyenne' journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) No. Account Titles and Explanation Debit Credit (a) Equity Investments 12,900 Cash 12,900 (b) Cash 1,365 Dividend Revenue 1,365 (c) Fair Value Adjustment 1,900 Unrealized Holding Gain or Loss - Income 1,900 Click if you would like to Show Work for this question: Open Show Work
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started