Question: On 30 June 20X2 King Limited purchased 10 000 shares of

On 30 June 20X2, King Limited purchased 10,000 shares of Prince Inc. for $ 12,000 plus $ 1,000 in commission. In 20X2, the company received a $ 500 of dividends, and the shares had a fair value of $ 16,000 at the end of the year. In 20X3, there were no dividends and the shares were sold for $ 22,000 less a $ 500 commission.

Prepare journal entries for 20X2 and 20X3, if the company uses the:
a. Cost method.
b. Fair- value- through- profit- and- loss Fair-value-through-profit-and-loss method.

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  • CreatedFebruary 17, 2015
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