Parent has significant influence over subsidiary prepare


Parent Company purchases 25% of the outstanding 50,000 shares of Subsidiary Company on January 1, 19X1, for $75,000. During 19X1, Subsidiary Company earns $100,000 net income and distributes a dividend of $1.00 per share. Assume Parent has "significant influence" over Subsidiary. Prepare the necessary journal entries and show the investment account.

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