On January 1, Vince Corporation purchased a25% equity in Morelli Corporation for
ID: 2355648 • Letter: O
Question
On January 1, Vince Corporation purchased a25% equity in Morelli Corporation for $172,700. At December 31, Morelli declared and paid a $43,300cash dividend and reported net income of $162,900.Journalize the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date Account Titles and Explanation Debit Credit Jan. 1
Dec. 31
(To record dividends received)
Dec. 31
(To record equity in Morelli Corporation's net income)
Date Account Titles and Explanation Debit Credit Jan. 1 Dec. 31 (To record dividends received) Dec. 31 (To record equity in Morelli Corporation's net income) On January 1, Vince Corporation purchased a25% equity in Morelli Corporation for $172,700. At December 31, Morelli declared and paid a $43,300cash dividend and reported net income of $162,900.
Explanation / Answer
Jan. 1 Debit: Investment in Morelli 172,700 Credit: Cash 172,700 Dec. 31 Debit: Cash 10,825 Credit: Investment in Morelli 10,825 Dec 31. Debit: Investment in Morelli 40,725 Credit: Equity in Morelli's income 40,725