Create necessary journal entries to record all transactions

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Reference no: EM133085423

Question - A) Molson Canada Ltd. Purchases a 30% investment or 3.000 shares in Back 40 Distillerv Inc. for $300,000 cash on January 2, 2020. They intend to hold this investment for at least five years.

B) On December 31, 2020 Back 40 Distillery reports net income of $120,000 for the year.

C) On March 31, 2021 Back 40 Distillery declares and pays a cash dividend of $7 per share.

D) On November 1, 2021 Molson sells 500 shares of Back 40 Distillery to Big Rock Brewery for $125 per share.

Required -

1. What type of investment is this and how should it be classified on the balance sheet?

2. Create the necessary journal entries to record all of the above transactions, no descriptions are required.

Reference no: EM133085423

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