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

Equity-method Investment in Rockaway Software ..................................................... $615,000

Lansing completed the following investment transactions during the year:

At year-end, the fair values of Lansing’s investments were as follows: Lowell, $26,100; Rockaway Software, $749,000.

Requirements

1. Record the transactions in the journal of Lansing.

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

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

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Purchased 1,500 shares of Lowell, Inc. common stock (10% of Lowell's stock) as a long-term equity investment, paying $12.75 per share. Received a cash dividend of $2.50 per share on the Lowell investment. Received a cash dividend of $88,000 from Rockaway Software. Received annual reports from Rockaway Software; net income for the year was $500,000. Of this amount, Lansing's share was 21%. Mar 16 May 21 Aug 17 Dec 31