On January 3, 2019, Martin Company purchased for $500,000 cash a 10% interest in Renner Corp. The fair value of Martin's investment in Renner securities is as follows: December 31, 2019, $560,000, and December 31, 2020, $515,000. On January 2, 2021, Martin purchased an additional 30% of Renner's stock for $1,545,000 cash. During 2019, 2020, and 2021, the following occurred.   Renner Net Income Dividends Paid by Renner to Martin 2019 $350,000 $15,000 2020   450,000   20,000 2021   550,000   70,000 Instructions On the books of Martin Company, prepare all journal entries in 2019, 2020, and 2021 that relate to its investment in Renner Corp., reflecting the data above and a change from the fair value method to the equity method.

Question

On January 3, 2019, Martin Company purchased for $500,000 cash a 10% interest in Renner Corp. The fair value of Martin's investment in Renner securities is as follows: December 31, 2019, $560,000, and December 31, 2020, $515,000. On January 2, 2021, Martin purchased an additional 30% of Renner's stock for $1,545,000 cash.

During 2019, 2020, and 2021, the following occurred.

 

Renner

Net Income

Dividends Paid by

Renner to Martin

2019
$350,000
$15,000
2020
  450,000
  20,000
2021
  550,000
  70,000

Instructions

On the books of Martin Company, prepare all journal entries in 2019, 2020, and 2021 that relate to its investment in Renner Corp., reflecting the data above and a change from the fair value method to the equity method.

 

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