Using the information from E16–6, calculate the balance in the Investment in Minecraft Ltd. Common Shares account. Assume that after all the above transactions took place, Kinross Gold Corp. sold its entire investment in Minecraft Ltd. common shares for $13,200,000 cash. Journalize the sale of the investment on December 31. Disregard brokerage commissions on sale.

E16–6

Kinross Gold Corp. paid $12,000,000 to acquire a 40 percent investment in Minecraft Ltd. Further, assume Minecraft Ltd. reported net income of $1,780,000 for the first year and declared and paid cash dividends of $650,000. Record the following entries in Kinross’s general journal:

Jan. 2 Purchase of the investment. Disregard brokerage commissions on the purchase.

Dec. 31 Kinross’s proportion of Minecraft Ltd.’s net income.

Dec. 31 Receipt of the cash dividends.