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Prepare Rockets journal entries to record all transactions

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Question - Rockets Corporation purchases a 25% interest in Heats Corporation on January 2, 2020, for $ 750,000. With 25% ownership and proportionate representation in the Board of Directors, Rockets is deemed to possess significant influence. At that time, the carrying amount of Heats' net assets was $ 2,952,000. Any excess of the cost of the investment over Rockets' share of Heats' carrying amount can be attributed to unrecorded intangibles with a useful life of eight (8) years. Heats declared and paid a dividend of $ 33,210 and reported net income of $ 73,800 for its year ending December 31, 2020.

Instructions -

1. Prepare Rockets' 2020 journal entries to record all transactions and events related to the investment in its associate. Assume Rockets is a publicly accountable enterprise that applies IFRS.

2. At the end of 2020, what is the carrying value of the Rockets' investment in Heats? Show all details.

Reference no: EM132614899

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