Fair Value Journal Entries
Marlow Company acquired 40 percent of the voting shares of Brown Company on January 1, 20X8, for $85,000. The following results are reported for Brown Company:
| 20X8 | 20X9 |
Net income | $20,000 | $30,000 |
Dividends paid | 10,000 | 15,000 |
Fair value of shares held by Marlow: |
|
|
January 1 | 85,000 | 97,000 |
December 31 | 97,000 | 92,000 |
Required
Give all journal entries recorded by Marlow for 20X8 and 20X9 assuming it uses the fair value method in accounting for its investment in Brown.
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