Reference no: EM133147399

Question - On January 4, 2017, Investor company paid $48.6 million cash for 2 million shares of investee corp. common stock. The investment represents a 4% interest in the net assets of Investee. Investor does not have significant influence over the investee corp. The investment was not made to speculate in short-term price movements. Investor received dividends of $0.55 per share on December 31, 2017. The market value of Investee's common stock at December 31, 2017, was $26.50 per share. On the purchase date, the book value of the investee's net assets was $600 million and the fair market value of Investee's depreciable assets, with an average remaining useful life of fifteen years, exceeded their book value by $140 million. The fair market values and book values were equal for Investee's other net assets. Prepare all journal entries required by Investor in 2017.