Gregory Inc. acquired 24% of the outstanding common stock of Handerson Inc. on December 31, 2012. The purchase price was $1,385,100 for 51,300 shares. Handerson Inc. declared and paid an $0.76 per share cash dividend on June 30 and on December 31, 2013. Handerson reported net income of $822,200 for 2013. The fair value of Handerson's stock was $29 per share at December 31, 2013.
Prepare the journal entries for Gregory Inc. for 2012 and 2013, assuming that Gregory can exercise significant influence over Handerson. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date Account Titles and Explanation Debit Credit
Dec. 31, 2013