On January 1,2017, Blue Corporation purchased 30% of the common shares of Kingbird Company for $170,000....

On January 1,2017, Blue Corporation purchased 30% of the common shares of Kingbird Company for $170,000. During the year, Kingbird earned net income of $78,000 and paid dividends of $19,500. Prepare the entries for Blue to record the purchase and any additional entries related to this investment in Kingbird Company of 2017.

Expert Solution

Journal Entries in the Books of Blue Corporation

Investment in Kingbird A/c Dr $1,70,000

To Cash A/c Cr $1,70,000

Investment in Kingbird A/c Dr $23,400

To Investment Revenue A/c Cr $23,400

( $78,000 x 30%)

Cash A/c Dr $5,850

To Investment in Kingbird A/c Cr $5,850

($19,500 x 30%)

ekkarill92 answered 1 year ago

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