On January 1, 2017, Nash Corporation purchased 40% of the common shares of Crane

Question

On January 1, 2017, Nash Corporation purchased 40% of the common shares of Crane Company for $185,000. During the year, Crane earned net income of $91,000 and paid dividends of $22,750.

Prepare the entries for Nash to record the purchase and any additional entries related to this investment in Crane 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.)

Account Titles and Explanation

Debit

Credit

(To record purchase of stock.)

(To record receipt of dividends.)

(To record revenue.)

Explanation / Answer

General Journal Debit Credit Stock Investments $185,000 Cash $185,000 Cash($22,750 * 40%) $9,100 Stock investments $9,100 Stock investments($91,000 * 40%) $36,400 Investments Revenues $36,400

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