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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

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
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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