Journal entries to apply the equity method of accounting for investments in securities

Journal entries to apply the equity method of accounting for investments in securities

17.   Journal entries to apply the equity method of accounting for investments in securities. Wood Corporation made three long-term intercorporate investments on January 2. Data relating to these investments for the year appear next.

 

  Carrying  
Value and
Fair Value of  

Net

Dividends
Identifiable   Income Declared
  Percentage Net Assets Acquisition (Loss) for During
Company Acquired on January 2

Cost

the Year the Year
Knox Corporation . . . . . . 50% $700,000 $350,000 $ 70,000 $30,000
Vachi Corporation . . . . . .

30

520,000 196,000 40,000 15,000
Snow Corporation . . . . . .

20

400,000 100,000 (24,000)

 

Give the journal entries to record the acquisition of these investments and to apply the equity method during the year. There are no goodwill   impairments.