Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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On March 31, 2024, Chow Brothers, Incorporated, bought 6% of KT Manufacturing's capital stock for $55.4 million. KT's net income for
the year ended December 31, 2024, was $81.8 million. The fair value of the shares held by Chow was $38.6 million at December 31,
2024. KT did not declare or pay a dividend during 2024.
Required:
1. Prepare all appropriate journal entries related to the investment during 2024.
2. Assume that Chow sold the stock on January 20, 2025, for $31.8 million. Prepare the journal entries to record the sale.
Complete this question by entering your answers in the tabs below.
Required 1
Prepare all appropriate journal entries related to the investment during 2024.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in
millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).
View transaction list
Required 2
Journal entry worksheet
<
1
2
Date
Record the entry for KT's net income.
Note: Enter debits before credits.
3
General Journal
Debit
Credit
>
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Transcribed Image Text:On March 31, 2024, Chow Brothers, Incorporated, bought 6% of KT Manufacturing's capital stock for $55.4 million. KT's net income for the year ended December 31, 2024, was $81.8 million. The fair value of the shares held by Chow was $38.6 million at December 31, 2024. KT did not declare or pay a dividend during 2024. Required: 1. Prepare all appropriate journal entries related to the investment during 2024. 2. Assume that Chow sold the stock on January 20, 2025, for $31.8 million. Prepare the journal entries to record the sale. Complete this question by entering your answers in the tabs below. Required 1 Prepare all appropriate journal entries related to the investment during 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5). View transaction list Required 2 Journal entry worksheet < 1 2 Date Record the entry for KT's net income. Note: Enter debits before credits. 3 General Journal Debit Credit >
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