Use the following information for the Problems below. (Algo)

Skip to question

[The following information applies to the questions displayed below.]

Selk Steel Company, which began operations in Year 1, had the following transactions and events in its long-term investments.

Year 1

January 5	Selk purchased 50,000 shares (20% of total) of Kildaire's common stock for $1,500,000.
October 23	Kildaire declared and paid a cash dividend of $2.40 per share.
December 31	Kildaires net income for the year is $1,112,000, and the fair value of its stock at December 31 is $34 per share.

Year 2

October 15	Kildaire declared and paid a cash dividend of $3.30 per share.
December 31	Kildaires net income for the year is $1,166,000, and the fair value of its stock at December 31 is $37 per share.

Year 3

January 2	Selk sold 2% (equal to 1,000 shares) of its investment in Kildaire for $68,000 cash.

Problem 15-6A (Algo) Accounting for long-term investments in stock without significant influence LO P4

Assume that although Selk owns 20% of Kildaires outstanding stock, circumstances indicate that it does not have a significant influence over the investee.

Required:

Prepare journal entries to record the preceding transactions and events for Selk.