An investor company purchases a $20\%$ interest in an investee company, and the investor concludes that it can exert significant inf luence over the investee. The book value of the investee$$s Stockholders$$ Equity on the acquisition date is $$2,250,000$ and the investor purchases its $20\%$ interest for $$585,000$ The investor is willing to pay the purchase price because the investee owns an unrecorded $($internally developed$)$ patent with a fair value equal to $$585,000$ The patent has a remaining useful life of $10$ years. Subsequent to the acquisition, the investee reports net income of $$540,000$ and pays a cash dividend to the investor of $$45,000$ At the end of the first year, the investor sells the Equity Investment for $$720,000$ Prepare all of the required journal entries to account for this Equity Investment during the year.

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Journal Entries for Equity Investment 1 Initial Investment Debit Investment in Investee Company asse... View the full answer