Kingbird Donald Inc. acquired 20% of the outstanding common stock of Theresa Ivanhoe Inc. on December 31, 2025. The purchase price was $1,205,000 for 48,200 shares. Ivanhoe Inc. declared and paid an $0.85 per share cash dividend on June 30 and on December 31, 2026. Ivanhoe reported net income of $692,000 for 2026. The fair value of Ivanhoe's stock was $28 per share at December 31, 2026. Assume that the security is a trading security. (a) Prepare the journal entries for Kingbird Donald Inc. for 2025 and 2026, assuming that Donald cannot exercise significant influence over Ivanhoe. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit
Kingbird Donald Inc. acquired 20% of the outstanding common stock of Theresa Ivanhoe Inc. on December 31, 2025. The purchase price was $1,205,000 for 48,200 shares. Ivanhoe Inc. declared and paid an $0.85 per share cash dividend on June 30 and on December 31, 2026. Ivanhoe reported net income of $692,000 for 2026. The fair value of Ivanhoe's stock was $28 per share at December 31, 2026. Assume that the security is a trading security. (a) Prepare the journal entries for Kingbird Donald Inc. for 2025 and 2026, assuming that Donald cannot exercise significant influence over Ivanhoe. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 25E
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Transcribed Image Text:Kingbird Donald Inc. acquired 20% of the outstanding common stock of Theresa Ivanhoe Inc. on December 31, 2025. The purchase
price was $1,205,000 for 48,200 shares. Ivanhoe Inc. declared and paid an $0.85 per share cash dividend on June 30 and on December
31, 2026. Ivanhoe reported net income of $692,000 for 2026. The fair value of Ivanhoe's stock was $28 per share at December 31,
2026. Assume that the security is a trading security.
(a)
Prepare the journal entries for Kingbird Donald Inc. for 2025 and 2026, assuming that Donald cannot exercise significant
influence over Ivanhoe. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is
entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal
entries in the order presented in the problem.)
Date
Account Titles and Explanation
Debit
Credit
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