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Grand Cosmetics acquired 10% of the 200,000 shares of common stock of Cey Fashion at a...

  1. Grand Cosmetics acquired 10% of the 200,000 shares of common stock of Cey Fashion at a total cost of $13 per share on March 18, 2020. On June 30, Cey declared and paid a $60,000 dividend. On December 31, Grand reported net income of $400,000 and Cey reported net income of $110,000 for the year. At December 31, the market price of Cey Fashion was $15 per share. The stock is classified as trading securities. Instruction: Record any necessary journal entries for Grand related to the investment.
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Journal Entries for Grant related to the Investment.

Date Particulars Debit Credit
18-03-2020 Equity Investment (2,00,000 shares X 10% X $13) $2,60,000
Cash $2,60,000
[ To record Investment made ]
30-06-2020 Cash ($60,000 X 10%) $6,000
Dividend Revenue $6,000
[To record Dividend Earned]
31-12-2020 Securties Fair Value Adjustment ($15 - $13 X 20,000 shares) $40,000
Unrealized Holding Gain or Loss $40,000
[To record Investment at Fair Value]
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