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.

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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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