Brief Exercise 177 Teal Corporation purchased for 317000 a 2

Brief Exercise 17-7 Teal Corporation purchased for $317,000 a 25% interest in Murphy, Inc. This investment enables Teal to exert significant influence over Murphy. During the year, Murphy earned net income of $192,000 and paid dividends of $65,000 Prepare Teal\'s journal entries related to this investment. (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.) Account Titles and Esplanation Crede To recond the purchase) To record the net income (To record the dividend Click if you would like to Show Work for this question Qn Shew w LEST OF ACCOUNTS

Solution

Answer :-

                                Journal Entries

Date

Account Titles and Explanation

L.F

Amount ($)

Amount ($)

Investment in Murphy Inc.

3,17,000

   Cash

3,17,000

(To record the purchase )

Investment in Murphy Inc.

48,000

   Investment Income

48,000

(To record the net income)

1,92,000*25%

Cash

16,250

   Investment in Murphy Inc.

16,250

(To record the dividend)

65,000*25%

Date	Account Titles and Explanation	L.F	Amount ($)	Amount ($)
	Investment in Murphy Inc.		3,17,000
	Cash			3,17,000
	(To record the purchase )
	Investment in Murphy Inc.		48,000
	Investment Income			48,000
	(To record the net income)
	1,92,000*25%
	Cash		16,250
	Investment in Murphy Inc.			16,250
	(To record the dividend)
	65,000*25%