Investments in Stock-Equity Method
Response to the following problem:
On January 3, 2009, Jorgenson, Inc., purchased 30,000 shares of the outstanding common stock of Horace Corporation. At the time of this transaction, Horace has 100,000 shares of common stock outstanding. The cost of the purchase (including brokerage fees) was $19 per share. During the year, Horace reported income of $32,000 and paid dividends of $4,000. On December 31, 2009, Horace's stock was valued at $23 per share.
Provide the entries necessary to record the above transactions.