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Prepare journal entries to record the purchase

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Question - On 30 September 2017, Kukuh Bhd acquired 18,000 shares of Mantap Bhd at RM2.00 per share. Transaction cost incurred was RM6,500. Kukuh Bhd intends to establish these shares as a long term (non-trading) investment.

Kukuh Bhd also acquired 15,000 shares of Sempurna Bhd at RM2.50 per share on the same date and the transaction cost incurred was RM7,500. Kukuh Bhd intends to sell shares of Sempurna Bhd in early 2018 to take advantage of the changes in the share prices.

Kukuh Bhd received a cash dividend of RM0.10 per unit of its investment in shares of Mantap Bhd on 30 December 2017. On 31 December 2017 (financial year end), the fair value per share of Mantap Bhd and Sempurna Bhd were RM2.50 and RM2.80 respectively.

Kukuh Bhd sold all shares of Sempurna Bhd at the selling price of RM3.00 per share on 15 February 2018.

Required -

(a) Prepare journal entries to record the purchase, the dividend received and the fair value adjustment of investment in Mantap Bhd.

(b) Prepare journal entries to record the purchase, the fair value adjustment and the selling of investment in Sempurna Bhd.

Reference no: EM133090506

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