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Q3. Prepare the journal entries for the following transactions for Remote Co. July 1 Morgan Co....

Q3. Prepare the journal entries for the following transactions for Remote Co. July 1 Morgan Co. purchased 42,000 shares of the total of 100,000 outstanding shares of Gordon Corp. stock for $18 per share plus a $200 commission. Dec. 31 Gordon Corp.'s total earnings for the period are $150,000. 31 Gordon Corp. paid a total of $23,000 in cash dividends.

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Answer #1
% Share holding 42% (42,000 /100,000 )
Equity Method
Date Account Titles Debit $ Credit $
July.1 Investment in Gordon Corp.        756,200
Cash 756,200
( 42,000 x 18 ) + 200
Dec.31 Investment in Gordon Corp.           63,000
Investment Revenue      63,000
(150,000 x 42% )
Dec.31 Cash             9,660
Investment in Gordon Corp.        9,660
(23,000 x 42% )
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