Questloh b On January 1, 2017, Ivanhoe Corporation purchased 40% of the common s

Question

Questloh b On January 1, 2017, Ivanhoe Corporation purchased 40% of the common shares of Shamrock Company for $204,000. During the year, Shamrock earned net income of $79,000 and paid dividends of $19,750 Prepare the entries for Ivanhoe to record the purchase and any additional entries related to this investment in Shamrock Company in 2017. (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 0 for the amounts.) Account Titles and Explanation Debit Credit (To record purchase of stock.) (To record receipt of dividends.) (To record revenue.)

Explanation / Answer

Accounts Title & Explanation

Debit

Credit

Investments in Shamrock

$204000

      Cash

$204000

(To record purchase of stock)

Cash ($19750 * 0.40)

$7900

      Investments in Lake Corporation

$7900

(To record receipt of dividends)

Investments in Shamrock ($79000 * 0.40)

$31600

      Investment Revenue

$31600

(To record revenue)

Accounts Title & Explanation

Debit

Credit

Investments in Shamrock

$204000

      Cash

$204000

(To record purchase of stock)

Cash ($19750 * 0.40)

$7900

      Investments in Lake Corporation

$7900

(To record receipt of dividends)

Investments in Shamrock ($79000 * 0.40)

$31600

      Investment Revenue

$31600

(To record revenue)

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