Covington Services Ltd. acquired 30% of the common shares of Bella Roma Ltd. on January...
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Covington Services Ltd. acquired 30% of the common shares of Bella Roma Ltd. on January 1, 2018, by paying $3,660,000 for 205,000 shares. Bella Roma declared a $0.50-per-share cash dividend in each quarter that was received on March 15, June 15, September 15, and December 15. Bella Roma reported net income of $2,310,000 for the year. At December 31, the market price of the Bella Roma shares was $17 per share.
Prepare the journal entries for Covington Services for 2018, assuming Covington can exercise significant influence over Bella Roma and uses the equity method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit
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