Mayor Company bought 5% of Pegasus Inc.'s common stock on 1/1/19 for $200,000 and used the...

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Mayor Company bought 5% of Pegasus Inc.'s common stock on 1/1/19 for $200,000 and used the fair value method. On 1/1/21, Mayor bought an additional 20% of Pegasus Inc.'s common stock for $800,000. This additional ownership of common stock gave Mayor the ability to significantly influence Pegasus. On 1/1/21, the fair value of the common stock was $2,700,000 and book value of $2,000,000. On 1/1/21, Pegasus had total assets of $4,800,000 and total liabilities of $2,400,000, and any excess cost is attributed to Goodwill. For the year 2021, Pegasus Inc. had Other Comprehensive Loss of $100,000. Record the journal entries related to the additional purchase and the Other Comprehensive Loss. Mayor Company bought 5% of Pegasus Inc.'s common stock on 1/1/19 for $200,000 and used the fair value method. On 1/1/21, Mayor bought an additional 20% of Pegasus Inc.'s common stock for $800,000. This additional ownership of common stock gave Mayor the ability to significantly influence Pegasus. On 1/1/21, the fair value of the common stock was $2,700,000 and book value of $2,000,000. On 1/1/21, Pegasus had total assets of $4,800,000 and total liabilities of $2,400,000, and any excess cost is attributed to Goodwill. For the year 2021, Pegasus Inc. had Other Comprehensive Loss of $100,000. Record the journal entries related to the additional purchase and the Other Comprehensive Loss.

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To record the journal entries related to the additional purchase of Pegasus Incs common stock and th... View the full answer