Pesci Limited acquired 40% of Excel Corporations 59,000 common shares for $16 per share on...
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Pesci Limited acquired 40% of Excel Corporations 59,000 common shares for $16 per share on January 1, 2021. On June 15, Excel declared a dividend of $129,000 and Pesci received its share of the dividend on the same day. On December 31, Excel reported net income of $297,000 for the year. At December 31, Excels shares were trading at $20 per share. Pesci accounts for this investment using the equity method. Pesci also acquired 15% of the 432,000 common shares of Gunther Ltd for $29 per share on March 18, 2021. On June 30, Gunther declared a $276,000 dividend and Pesci received its share of these dividends on that day. On December 31, Gunther reported net income of $690,000 for the year. At December 31, Gunthers shares were trading at $26 per share. Pesci intends to hold on to the Gunther shares as a long-term investment for the dividend income. Pesci uses the fair value through profit or loss model for this investment. Record the above transactions for the year ended December 31, 2021.
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