Question: On January 2 , 2 0 2 4 , ABC Corporation purchased 3 5 % of the outstanding common stock of XYZ , Inc. and

On January 2,2024, ABC Corporation purchased 35% of the outstanding common stock of XYZ, Inc. and subsequently
used the equity method to account for the investment. The purchase price was $1,777,500. At the time of the
acquisition, XYZ's net assets had fair values approximating book values. During 2024 XYZ, Inc. reported net income of
$1,800,000 and distributed dividends of $450,000.
Requirements - Provide the journal entry that ABC would make for each the following:
A. To record the purchase of xYZ.
B. To recognize net income of xYZ.
C. To record dividends received from XYZ.
On January 2,2024, ABC Corporation purchased 35% of the outstanding common

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