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On January 1, 2017, Fisher Corporation purchased 40 percent (80,000 shares) of the common stock of...

On January 1, 2017, Fisher Corporation purchased 40 percent (80,000 shares) of the common stock of Bowden, Inc. for $976,000 in cash and began to use the equity method for the investment. The price paid represented a $60,000 payment in excess of the book value of Fisher's share of Bowden's underlying net assets. Fisher was willing to make this extra payment because of a recently developed patent held by Bowden with a 15-year remaining life. All other assets were considered appropriately valued on Bowden's books. Bowden declares and pays a $92,000 cash dividend to its stockholders each year on September 15. Bowden reported net income of $402,000 in 2017 and $346,000 in 2018. Each income figure was earned evenly throughout its respective year. On July 1, 2018, Fisher sold 10 percent (20,000 shares) of Bowden's outstanding shares for $332,000 in cash. Although it sold this interest, Fisher maintained the ability to significantly influence Bowden's decision-making process. Prepare the journal entries for Fisher for the years of 2017 and 2018.

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8) 9/15/2018 Cash (92000*3096) $ 27,600 Investment in Bowden $ 27,600 To record the adjustment of dividend received) 9) 12/31/2018 Investment in Bowden (346000*30%)/2 51,900 $ 51,900 Equity in investee Income To record the income from investment) 10) 12/31/2018 Equity in investee Income (60000/40*30)/15)/2 $ 1,500 Investment in Bowdern $1,500 To record the amortization of patent)

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