On January 1, 2011, American Corporation purchased 25% of the outstanding voting shares of Short Supplies common stock for $210,000 cash. On that date, Short's book value and fair value were both $840,000. The equity method is deemed appropriate for this investment. Short's net income reported on December 31, 2021, was $80,000. In 2021, Short also paid cash dividends in the amount of $24,000.  

Required: 

Prepare the journal entries necessary to record the above information on American Corporation's books during 2011. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer rating: 100% (QA)

Date General Journal Debit Credit Jan 0... View the full answer