epare the journal entries for Grouper for 2019 and 2020, assuming that Grouper cannot exercise significant influence over Gregson. The investment is accounted for using the FV-OCI model. (Credit account titles are automatically indented when the amount is entered. Do not indent manual
epare the journal entries for Grouper for 2019 and 2020, assuming that Grouper cannot exercise significant influence over Gregson. The investment is accounted for using the FV-OCI model. (Credit account titles are automatically indented when the amount is entered. Do not indent manual
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 25E
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Question
Grouper Inc. acquired 10% of the outstanding common shares of Gregson Inc. on December 31, 2019. The purchase price was $904,000 for 45,200 shares, and is equal to 10% of Gregson’s carrying amount. Gregson declared and paid a $0.80 per share cash dividend on June 15 and again on December 15, 2020. Gregson reported net income of $516,000 for 2020. The fair value of Gregson’s shares was $24 per share at December 31, 2020. Grouper is a public company and applies IFRS.
Prepare the journal entries for Grouper for 2019 and 2020, assuming that Grouper cannot exercise significant influence over Gregson. The investment is accounted for using the FV-OCI model. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Date
|
Account Titles and Explanation
|
Debit
|
Credit
|
---|---|---|---|
choose a transaction date Dec. 15, 2020Jun. 15, 2020Dec. 31, 2019
|
enter an account title
|
enter a debit amount
|
enter a credit amount
|
enter an account title
|
enter a debit amount
|
enter a credit amount
|
|
choose a transaction date Dec. 31, 2019Dec. 15, 2020Jun. 15, 2020
|
enter an account title
|
enter a debit amount
|
enter a credit amount
|
enter an account title
|
enter a debit amount
|
enter a credit amount
|
|
choose a transaction date Dec. 31, 2019Dec. 15, 2020Jun. 15, 2020
|
enter an account title
|
enter a debit amount
|
enter a credit amount
|
enter an account title
|
enter a debit amount
|
enter a credit amount
|
|
choose a transaction date Dec. 15, 2020Dec. 31, 2020Dec. 31, 2019
|
enter an account title
|
enter a debit amount
|
enter a credit amount
|
enter an account title
|
enter a debit amount
|
enter a credit amount
|
Prepare the journal entries for Grouper for 2019 and 2020, assuming that Grouper can exercise significant influence over Gregson. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Date
|
Account Titles and Explanation
|
Debit
|
Credit
|
---|---|---|---|
choose a transaction date Dec. 31, 2020Jun. 15, 2020Dec. 31, 2019Dec. 15, 2020
|
enter an account title
|
enter a debit amount
|
enter a credit amount
|
enter an account title
|
enter a debit amount
|
enter a credit amount
|
|
choose a transaction date Jun. 15, 2020Dec. 31, 2020Dec. 31, 2019Dec. 15, 2020
|
enter an account title
|
enter a debit amount
|
enter a credit amount
|
enter an account title
|
enter a debit amount
|
enter a credit amount
|
|
choose a transaction date Dec. 15, 2020Jun. 15, 2020Dec. 31, 2019Dec. 31, 2020
|
enter an account title
|
enter a debit amount
|
enter a credit amount
|
enter an account title
|
enter a debit amount
|
enter a credit amount
|
|
choose a transaction date Jun. 15, 2020Dec. 31, 2020Dec. 15, 2020Dec. 31, 2019
|
enter an account title to record investment income
|
enter a debit amount
|
enter a credit amount
|
enter an account title to record investment income
|
enter a debit amount
|
enter a credit amount
|
|
(To record investment income)
|
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