Journal entries to apply the equity method of accounting for investment in securities.
Wood Corporation made three long term intercorporate investments on January 2. Data relating to these investments for the year appear next.
|
Company |
Percentage Acquired |
Carrying Value and |
Acquisition Cost |
Net Income (Loss) for the Year |
Dividends |
|
|
Knox Corporation |
50% |
$700,000 |
$350,000 |
$ 70,000 |
$30,000 |
|
|
Vachi Corporation |
30 |
520,000 |
196,000 |
40,000 |
15,000 |
|
|
Snow Corporation |
20 |
400,000 |
100,000 |
(24,000) |
— |
|
Give the journal entries to record the acquisition of these investments and to apply the equity method during the year. There are no goodwill impairments.