Reference no: EM133135072
Question - November 5, 2015, Democrat Corporation purchased ordinary shares of three companies, each investment representing less than a 20 percent interest. These shares are held-for-trading.
|
Cost Nov 5, 2015
|
Fair Value Dec 31, 2015
|
|
Britney Corporation
|
141,400
|
104,000
|
|
Player Inc
|
259,700
|
275,000
|
|
Zurich Corporation
|
317,500
|
304,000
|
|
Total
|
718,600
|
683,000
|
Required -
1. Prepare Journal entry at the date of the ordinary shares purchase on November 5, 2015.
2. On December 7, 2015, Democrat receives a cash dividend of €4,500 on its investment in the ordinary shares of Zurich. Prepare journal entry to record the dividend.
3. Prepare the adjusting journal entry needed on December 31, 2015.
4. On January 23, 2016, Democrat sold all of its Player ordinary shares, receiving €287,250, prepare journal entry to record this transaction.