Reference no: EM132754482

On January 3, 2020, Grouper Limited purchased 3,700 (37%) of the common shares of Sonja Corp. for $548,950. The following information is provided about the identifiable assets and liabilities of Sonja at the date of acquisition:

                                                                        Carrying Amount              Fair Value
Assets not subject to depreciation            $513,000                    $513,000

Assets subject to depreciation (10 years remaining) 834,000              944,000

Total identifiable assets                             1,347,000                 1,457,000

Liabilities                                                    112,000                 112,000

During 2020, Sonja reported the following information on its statement of comprehensive income: 

Income before discontinued operations $206,000
Discontinued operations (net of tax). (73,900)
Net income and comprehensive income 132,100
Dividends declared and paid by Sonja November 15, 2020 71,000

Assume that the 37% interest is enough to make Sonja an associate of Grouper, and that Grouper is required to apply IFRS for its financial reporting. The fair value of Sonja's shares at December 31, 2020, is $150 per share.

Problem 1: Record all necessary journal entries associated with Grouper's investment in Sonja for 2020. Depreciable assets are depreciated on a straight-line basis. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)