Account Titles and Explanation | Debit | Credit |
Equity investment | 173,000 | |
Cash | 173,000 | |
( To record purchase of stock) | ||
Cash | 9,100 | |
Equity investment | 91,00 | |
( To record receipts of dividends) | ||
Equity investment | 36,400 | |
Revenue from investment | 36,400 | |
(To record revenue) |
Share of dividend = Dividend declared by Bonita company x Percentage of share acquired by Bonita company
= 22,750 x 40%
= $9,100
Share of net income = Net income of Bonita company x Percentage of share acquired by Bonita company
= 91,000 x 40%
= $36,400
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