The following investment activities relate to Bellows Corp. Bellows has a December 31 year end.
Year 1:
June 15
Bellows Corp. acquired 100 shares of Sonny, Inc. for $75 per share. The
purchase represented 5% of the outstanding shares of Sonny, Inc.
Bellows Corp. received dividends of $2 per share from Sonny, Inc.
The value of the Sonny stock at December 31, Year 1 was $120 per share.
Bellows sold the stock in Sonny, Inc. for $115 per share
For Year 1, prepare all journal and adjusting entries related to the investment in Sonny, Inc.
Credit
September 15
December 31
Year 2:
February 17
Date
PASSIVE INVESTMENT - EQUITY SECURITIES
Beg.
100,000
Accounts
b. Post all Year 1 entries above to the T-accounts below. The beginning Cash balance is given.
+ Cash (A) -
Debit
Instructor Manual / Appendix D/D-14
