Fredo, Incorporated, purchased 10% of Sonny Enterprises for $1,000,000 on January 1, 2024. Sonny recognized...
60.1K
Verified Solution
Link Copied!
Question
Accounting
Fredo, Incorporated, purchased 10% of Sonny Enterprises for $1,000,000 on January 1, 2024. Sonny recognized a total of $480,000 net income during 2024, paid $38,000 of dividends to Fredo during 2024, and at December 31, 2024, the market value of the Sonny investment increased to $1,048,000. Required: Prepare the journal entries necessary to account for the Sonny investment, assuming that Fredo (1) does not have significant influence : a) Record the entry for investment in Sonny Enterprises.
b) Record the revenue from Sonny Enterprise during 2024. c) Record the entry for cash dividend received.
d) Record the net unrealized holding gain or loss for an available-for-sale investment. (2) does have significant influence over the operating and financial policies of the investee. a)Record the purchase of Investment in equity affiliate. b)Record the revenue from Sonny Enterprise during 2024 c)Record the receipt of dividend during 2024. d)Record the net unrealized holding gain or loss for an available-for-sale investment.
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
