QS C-15 Equity method transactions LO P5 Rowan Co. purchases 100 common shares (40%) of JBI...

QS C-15 Equity method transactions LO P5

Rowan Co. purchases 100 common shares (40%) of JBI Corp. as a long-term investment for $500,000 cash on July 1. JBI Corp. paid $5,000 in total cash dividends on November 1 and reported net income of $100,000 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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