Prepare the journal entries for legan

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Problem 1: Legan, Inc., acquired 10 percent of Barta Corporation on January 1, 2017, for $186,000 and appropriately accounted for the investment using the fair-value method. On January 1, 2018, Legan purchased an additional 30 percent of Barta for $661,000 which resulted in significant influence over Barta. On that date, the fair value of Barta's common stock was $2,030,000 in total. Barta's January 1, 2018 book value equaled $1,880,000, although land was undervalued by $135,000. Any additional excess fair value over Barta's book value was attributable to a trademark with an 8-year remaining life. During 2018, Barta reported income of $345,000 and declared and paid dividends of $100,000. Prepare the 2018 journal entries for Legan related to its investment in Barta.

Reference no: EM132790068

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