Exercise 15-14

Need December 31 Year 2: Journal entry

Exercise 15-14 (Algo) Accounting for equity method Investments LO P5 Listed below are a few events and transactions of Kodax Company. Year 1 January 2 Purchased 25,89e shares of Grecco Company common stock for $421,eee cash. Grecco has 180,000 shares of common stock outstanding, and its activities will be significantly influenced by Kodax. September 1 Grecco declared and paid a cash dividend of $1.60 per share. December 31 Grecco announced that net income for the year is $488,480. Year 2 June 1 Grecco declared and paid a cash dividend of $1.90 per share. December 31 Grecco announced that net income for the year is $702,900. December 31 Kodax sold 8,080 shares of Grecco for $210, eee cash. Prepare journal entries to record the above transactions and events of Kodax Company. (Do not round Intermediate calculations and round your final answers to the nearest dollar amount.) View transaction list View journal entry worksheet No Debit Credit 1 Date General Journal January 2, Year 1 Equity method investments Cash 421,000 421,000 2 September 1. Year 1 Cash 40,000 Equity method investments 40.000 3 December 31, Year 1 Equity method investments 162,800 Earnings from equity method investments 162,800 4 June 1, Year 2 47,500 Cash Equity method investments 47,500 5 December 31. Year 2 234,300 Equity method investments Earnings from equity method investments 234.300 6 December 31, Year 2 Cash 210,000 Gain on sale of stock investments Equity method investments 73,060