652 Chapter 15 Investments Prepare journal entries to record

652 Chapter 15 Investments Prepare journal entries to record the following transactions and events of Kodax Company. Exercise 15-12 Securities transactions2017 equity method P4 a broker\'s fee of and its policies will be $3,000 cash. Grecco has 90,000 shares of common stock outstanding, significantly influenced by Kodax. Grecco declared and paid a cash dividend of $1.50 per share. Grecco announced that net income for the year is $486,900. Sep. 1 Dec. 31 2018 June 1 Dec. 31 Dec. 31 Grecco declared and paid a cash dividend of $2.10 per share. Grecco announced that net income for the year is $702,750. Kodax sold 10,000 shares of Grecco for $320,000 cash.

Solution

Journal Entries

date

explanation

debit

credit

jan 2 2017

Long term investment- Greeco

411000

cash

411000

1-Sep

cash

45000

Long term investment- Greeco

45000

december 31 2015

Long term investment- Greeco

162300

earning from long term investment

162300

june1 2016

cash

63000

Long term investment- Greeco

63000

dec 31 2016

Long term investment- Greeco

234250

earning from long term investment

234250

dec 31 2016

cash

320000

gain on sale of investment

86817

Long term investment- Greeco

233183

long term investment-greeco

(234250+162300+411000-45000-63000)/3

233183.3

gain on sale of investment

699550-233183

86817

Journal Entries
date	explanation	debit	credit
jan 2 2017	Long term investment- Greeco	411000
	cash		411000
1-Sep	cash	45000
	Long term investment- Greeco		45000
december 31 2015	Long term investment- Greeco	162300
	earning from long term investment		162300
june1 2016	cash	63000
	Long term investment- Greeco		63000
dec 31 2016	Long term investment- Greeco	234250
	earning from long term investment		234250
dec 31 2016	cash	320000
	gain on sale of investment		86817
	Long term investment- Greeco		233183
long term investment-greeco	(234250+162300+411000-45000-63000)/3	233183.3
gain on sale of investment	699550-233183	86817