REQUIRED 2 Sherrolyn Company invested in two companies in 2020 These company are
ID: 2403639 • Letter: R
Question
REQUIRED 2 Sherrolyn Company invested in two companies in 2020 These company are Bamco Company and KingF eco Industries, Inc. Facts about both investments are as follows Investee %Holding #Of shares Held CostShare FV/share at 12/31 Income of Investee 30,000 5,000 $11 $13 11.50 $14.75 $80,000 122.000 Bamco 40% KingFeco 75% In addition, Barnco paid $60.000 in total cash dividends in 2020 KingFeco paid a $30,000 total cash dividend in 2020 Prepare ALL 2020 required journal entries for both investments on the books of Sherrollyn Company REQUIRED Julie Company purchased bonds ith a total face value $900,000 from, Kippie Company on February 1, 2018 at 100 quote) and pay interest every February 1 The bonds are 9%, $1,000 bonds The bonds are a trading security o Jullie's books On December 31, the bonds have a market value reflecting a 97 quote Decomber 31 is fiscal year end Present ALL lournal entries related to the bond investment reauired by Jullie in 2018Explanation / Answer
Requirement -2
Journal entries Date Account Title and Explanation Debit Credit Jan-01 Available-for-sale Investments ( KingFeco) $195,000 Cash (15000 x $13) $195,000 (To record purchase of shares) Jan-01 Investment in Bamco Company $330,000 Cash (30000*$11) $330,000 (To record purchase of 30000 share) Dec-31 Cash ($30000*7.5%) $2,250 Dividend revenue- King Feco $2,250 (To record cash dividend received) Dec-31 Cash ($60000X40%) $24,000 Investment in Bemco Co. $24,000 (To record cash dividend received from Bamco Co.) Dec-31 Investment in Bemco $32,000 Equity income in Bemco. ($80000x40%) $32,000 (To record share in net income ofBemco Co. Dec-31 Unrealized gain on Available-for-sale Investments $26,250 Valuation allowance for available for sale investment $26,250 [(15000) x ($14.75-$13)] (To record available-for-sale investments- King Fece at fair value)Related Questions
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