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Rowan Co. purchases 800 common shares (40%) of JBI Corp. as a long-term investment for $570,000...

Rowan Co. purchases 800 common shares (40%) of JBI Corp. as a long-term investment for $570,000 cash on July 1. JBI Corp. paid $10,250 in total cash dividends on November 1 and reported net income of $205,000 for the year.
  
(1) - (3) Prepare Rowan's entries to record the purchase of JBI shares, the receipt of its share of JBI dividends and the December 31 year-end adjustment for its share of JBI net income.

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Answer #1
Journal entries:
Date General journal Debit Credit
July 1. Investment in JBL corp. 570000
Cash 570000
(Purchased 800 common shares as long
term investment)
Nov 1. Cash (10250*40%) 4100
Investment in JBL corp. 4100
(To record dividend received)
Dec 31. Investment in JBL corp. (205000*40%) 82000
Share in net income from JBL corp. 82000
(To record share of net income )
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