On January 1, 2023, Fisher Corporation purchased 40 percent (80,000 shares) of the common stock of...

 

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On January 1, 2023, Fisher Corporation purchased 40 percent (80,000 shares) of the common stock of Bowden, Incorporated, for $976,000 in cash and began to use the equity method for the Investment. The price paid represented a $60,000 payment in exce the book value of Fisher's share of Bowden's underlying net assets. Fisher was willing to make this extra payment because of a recently developed patent held by Bowden with a 15-year remaining life. All other assets were considered appropriately valued or Bowden's books. Bowden declares and pays a $92,000 cash dividend to its stockholders each year on September 15. Bowden reported net Income $402,000 in 2023 and $346,000 in 2024. Each Income figure was earned evenly throughout its respective years. On July 1, 2024, Fisher sold 10 percent (20,000 shares) of Bowden's outstanding shares for $332,000 in cash. Although it sold this Interest, Fisher maintained the ability to significantly influence Bowden's decision-making process. Required: Prepare the Journal entries for Fisher for the years of 2023 and 2024. Note: If no entry is required for a transaction/event, select "No Journal entry required" In the first account field. View transaction fist Journal entry worksheet < 1 2 3 4 5 6 7 Record the acquisition of Bowden's shares. Note: Enter debits before credits. Date 01/01/2023 General Journal Debit 10 Credit 1 Record the acquisition of Bowden's shares. 2 Record the annual dividend declared and received from Bowden. 3 Record the accrual of income for 2023. 4 Record amortization for 2023. 5 Record the accrual of income through 07/01/24. 6 Record amortization through 07/01/24. 7 Record the sale of the shares. 8 Record annual dividend declared and received. 9 Record the accrual of income for the second half of the year. 10 Record the amortization for the second half of the year. On January 1, 2023, Fisher Corporation purchased 40 percent (80,000 shares) of the common stock of Bowden, Incorporated, for $976,000 in cash and began to use the equity method for the Investment. The price paid represented a $60,000 payment in exce the book value of Fisher's share of Bowden's underlying net assets. Fisher was willing to make this extra payment because of a recently developed patent held by Bowden with a 15-year remaining life. All other assets were considered appropriately valued or Bowden's books. Bowden declares and pays a $92,000 cash dividend to its stockholders each year on September 15. Bowden reported net Income $402,000 in 2023 and $346,000 in 2024. Each Income figure was earned evenly throughout its respective years. On July 1, 2024, Fisher sold 10 percent (20,000 shares) of Bowden's outstanding shares for $332,000 in cash. Although it sold this Interest, Fisher maintained the ability to significantly influence Bowden's decision-making process. Required: Prepare the Journal entries for Fisher for the years of 2023 and 2024. Note: If no entry is required for a transaction/event, select "No Journal entry required" In the first account field. View transaction fist Journal entry worksheet < 1 2 3 4 5 6 7 Record the acquisition of Bowden's shares. Note: Enter debits before credits. Date 01/01/2023 General Journal Debit 10 Credit 1 Record the acquisition of Bowden's shares. 2 Record the annual dividend declared and received from Bowden. 3 Record the accrual of income for 2023. 4 Record amortization for 2023. 5 Record the accrual of income through 07/01/24. 6 Record amortization through 07/01/24. 7 Record the sale of the shares. 8 Record annual dividend declared and received. 9 Record the accrual of income for the second half of the year. 10 Record the amortization for the second half of the year.

Answer rating: 100% (QA)

Journal Entries for Fisher Corporation in 2023 and 2024 1 Acquisition of Bowdens shares January 1 20... View the full answer