Question

On January 2 2019. Crane Company purchased for 5497.000 cache 10 Interest in Cheyenne Corp (Accounted for alle For Sale investment. The fall value of Creea Investment in Cheyenne securities as follows: December 31, 2019 5558.000, and December 31, 2020, 5510.000.On January 2, 2021, Crane purchased an additional 30% of Cheyenneck for $1,532,000 cash when the book value of Cheyennes et ease was $4154.000. The excess we stributable to depredible sets having a remaining If year During 2019 2020 and 2021, the following occurred. 2019 2020 2021 Cheyenne Dividenda Pald by Net Income Cheyenne to Crane $350.000 $14.000 445,000 21.000 553.000 72.000 On the book of Crane Company, prepare all journal entrica in 2019 2020 and 2021 that relate to its Investment in Cheyenne Corp. recting the data above and change from the fair value method to the equity method (Credit account titles are automatically Indented when amount beltered. Do not indent manually. If no entry is required select "No Entry for the account title and enter for the Date Account Titles and Explanation Debit Credit (To record the purchase of a 10% Interest in Cheyenne Corp.) To record the receipt of cash dividends from Cheyenne Corp.) (To acust fair value) To record the receipt of cash dividends from Chee Corp.) (To acust fair value To record additional purchase.) (To recessity investment.) To eliminate accounts and balances used under fair value method accounting.) (To record equity in net income of Cheyenne) To record the receipt of cash dividends from Cheyenne Corp.)

Answer 1

Answer
Journal entry
Date	Account Titles and Explanations	Debit	Credit
03-Jan-19	Available for Sale Securities	$ 497,000
	To, Cash		$ 497,000
	(To record purchase of 10% interest in Cheyenne Corp.)
31-Dec-19	Cash	$        14,000
	To, Dividend revenue		$        14,000
	(To record dividend revenue for CheyeneCorp. booked)
31-Dec-19	Available for Sale Securities	$        61,000
	To, Unrealised profit & loss		$        61,000
	(To record raise of investment in Cheyene Corpto fair value of $558,000)
31-Dec-20	Cash	$        21,000
	To, Dividend revenue		$        21,000
	(To record dividend revenue for Cheyene Corp booked)
31-Dec-20	Unrealised profit & loss	$        48,000
	To, Available for Sale Securities		$        48,000
	(To record reducing the investment in Carla Corp to fair value of $510,000)
Jan 2 2021	Investment in indigo equity	$   15,32,000
	To, Cash		$   15,32,000
	(To record investment in the equity of Cheyene Corpof 30%)
Dec 31 2021	Investment in indigo equity	$ 497,000
	Unrealised profit & loss	$        13,000
	To, Available for Sale Securities		$     510,000
	(To record reclassification of 40% investment and elimination of
	accounts from fair value method to Equity method)
Jan 2, 2021	Investment in indigo equity	$     221,200
	To, Net Income of Indigo equity		$     2,21,200
	(To record recording of equity in net income of Cheyene Corp-
	40% of 553,000 )
Dec 31 2021	Cash	$ 72,000
	To,Investment in indigo equity		$ 72,000
	(To record dividend received from Cheyene Corp on equity investment)
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