Journalize the entries to record these transactions

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Reference no: EM132815070

Question - Forte Inc. produces and sells theater set designs and costumes. The company began operations on January 1, 20Y6. The following transactions relate to securities acquired by Forte Inc., which has a fiscal year ending on December 31, 20Y6:

Jan. 10 Purchased an influential interest in Imboden Inc. for $770,000 by purchasing 99,200 shares directly from the estate of the founder of Imboden Inc. There are 320,000 shares of Imboden Inc. stock outstanding.

Dec. 31 Received $57,000 of cash dividends on Imboden Inc. stock. Imboden Inc. reported net income of $470,000 in 20Y6. Forte Inc. uses the equity method of accounting for its investment in Imboden Inc.

Required -

1. Journalize the entries to record these transactions?

2. Should Forte Inc.'s investment in Imboden Inc. be reported at fair value on its financial statements for the year ending December 31, 20Y6?

Reference no: EM132815070

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