On August 3, 2015, Jeffrey Corporation purchased 3,800 shares of Kevin Company f

Question

On August 3, 2015, Jeffrey Corporation purchased 3,800 shares of Kevin Company for $220,400. The following information applies to the stock price of Kevin Company:

Kevin Company declares and pays cash dividends of $4 per share on June 1 of each year.

1. Record the appropriate journal entries for:
August 04, 2015
December 31, 2015
June 01, 2016
December 31, 2016
June 01, 2017
December 31, 2017

2.
8/4/2015 Record the purchase of 3,800 shares of Kevin Company for $220,400
12/31/2015 Record the fair value effects at year-end when the market price of the stock is $57 per share
6/1/2016 Record the cash dividends of $4 per share
12/31/2016 Record the fair value effects at year-end when the market price of the stock is $62 per share
6/1/2017 Record the cash dividends of $4 per share
12/31/2017 Record the fair value effects at year-end when the market price of the stock is $66 per share

3.
8/4/2015 Record the purchase of 3,800 shares of Kevin Company for $220,400
12/31/2016Record Jeffrey Corporations 35% portion of Kevin Company's $59,000 income
6/1/2016 Record the cash dividends of $4 per share
12/31/2016 Record Jeffrey Corporations 35% portion of Kevin Company's $59,000 income
6/1/2017 Record the cash dividends of $4 per share
12/31/2017 Record Jeffrey Corporations 35% portion of Kevin Company's $59,000 income

Explanation / Answer

1. Record the purchase of shares in Kevin Company Date Account Title Debit Credit 8/3/2015 Investment in Kevin Company 220400 Cash 220400 2. Record the fair value of investment in Kevin Company Date Account Title Debit Credit 12/31/2015 Unrealized gain / loss on kevin company shares 3800 Fair value adjustment - Kevin company shares 3800 3,800 (58.00-57.00) 3. Record the receipt of cash dividend from Kevin Company Date Account Title Debit Credit 6/1/2016 Cash 15200 Dividend Revenue 15200 4. Record the fair value of investment in Kevin Company Date Account Title Debit Credit 12/31/2016 Fair value adjustment - Kevin company shares 19000 Unrealized gain / loss on kevin company shares 19000 3,800 (62.00-57.00) 5. Record the receipt of cash dividend from Kevin Company Date Account Title Debit Credit 6/1/2016 Cash 15200 Dividend Revenue 15200 6. Record the fair value of investment in Kevin Company Date Account Title Debit Credit 12/31/2016 Fair value adjustment - Kevin company shares 15200 Unrealized gain / loss on kevin company shares 15200 3,800 (66.00-62.00)

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