The beginning balance sheet of Homesby Corporation included the following long-term asset:

Equity-method Investment in Jasmine Software ......................................................... $618,000

Homesby completed the following investment transactions during the year:

At year-end, the fair values of Homesby’s investments were as follows: Lowell, $39,000; Jasmine, $747,000.

Requirements

1. Record the transactions in the journal of Homesby.

2. Post entries to the T-account for Equity-method Investment in Jasmine Software, and determine its balance at December 31.

3. Show how to report the Investment in Equity Securities and the Equity-method Investment in Jasmine Software accounts on Homesby’s balance sheet at December 31.

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Purchased 2,700 shares Lowell, Inc. common stock (10% of Lowell's stock) as a long-term equity investment, paying $12.50 per share. Received a cash dividend of $2.25 per share on the Lowell investment. Received a cash dividend of $83,000 from Jasmine Software. Received annual reports from Jasmine Software; net income for the year was $550,000. Of this amount, Homesby's share was 27%. Mar 16 May 21 Aug 17 Dec 31