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On March 31 2018 Chow Brothers Inc bought 10% of KT Manufacturing s capital stock for $50 million KT s net income

On March 31, 2018, Chow Brothers, Inc., bought 10% of KT Manufacturing s capital stock for $50 million. KT s net income for the year ended December 31, 2018, was $80 million. The fair value of the shares held by Chow was $35 million at December 31, 2018. KT did not declare or pay a dividend during 2018. Required: 1. Prepare all appropriate journal entries related to the investment during 2018. 2. Assume that Chow sold the stock on January 20, 2019 for $30 million. Prepare the journal entry Sanborn would use to record the sale.

Apr 24 2020 View more View Less

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