Show all necessary journal entries for both situations

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Question - Presented below are two independent situations. Show all necessary journal entries in 2020 for both situations.

Situation 1: People Tables acquired 15% of the 5,000,000 shares of common stock of Robot Sofas at a total cost of $8.50 per share on April 1, 2020. On August 8, Robot Sofas declared and paid a cash dividend of $0.50 per share. On December 31, Robot Sofas market price was $9.00 per share and the company reported net income of $685.000 for the year.

Situation 2: On January 1, 2020, Mica Company purchased 40% of Santos Corporation 500,000 outstanding shares of common stock at a total cost of $13 per share. On October 25, Santos declared and paid a cash dividend of $0.40 per share. On December 31, Santos reported a net income of $860,000 for the year and the market price of its common stock was $14 per share.

Reference no: EM133144621

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