Question

33. Marigold Company acquires 66, 7%, 5 year, $1000 Community bonds on January 1, 2020 for $66000.
If Marigold sells all of its Community bonds for $70300, what gain or loss is recognized?

a. Gain of $4300

b. Loss of $4300

c. Gain of $8920

d. Loss of $8920

34. Concord Industries owns 40% of Ivanhoe Company. For the current year, Ivanhoe reports net income of $257000 and declares and pays a $60000 cash dividend. Which of the following correctly presents the journal entries to record Concord’s equity in Ivanhoe’s net income and the receipt of dividends from Ivanhoe?

Answer 1

33.)	Gain on sale of Bond	$ 4,300	=70300-66000
	Correct answer is option a.
34.)	Account Titles & Explanation	Debit $	Credit $
	Investment in Ivanhoe Company	102,800
	Investment Revenue ( 257,000 x 40% )		102,800
	( To record equity in Ivanhoe Net income )
	Cash ( 60,000 x 40% )	24,000
	Investment in Ivanhoe Company		24,000
	( To record receipt of Dividend )