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1 Johannes Inc. acquired 80 percent of Corner Brook Ltd. common shares on January 1,...

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Accounting

1 Johannes Inc. acquired 80 percent of Corner Brook Ltd. common shares on January 1, Year 4, for $744,000. At that date, the falr value
of the non-controlling interest was $186,000. Corner Brook's balance sheet contained the following amounts at the time of the
combination:
During each of the next three years, Corner Brook reported net income of $120,000 and paid dividends of $60,000. On January 1, Year
6, Johannes sold 8,800 of the Corner Brook shares for $260,000 In cash. Johannes used the equity method in accounting for Its
ownership of Corner Brook.
Required:
(a) Compute the balance in the investment account reported by Johannes on January 1, Year 6, before its sale of shares. (Omlt $ sign
In your response.)
Balance prior to sale of shares
(b) Prepare the entry recorded by Johannes when It sold the Corner Brook shares. (If no entry is required for a transactlon/event,
select "No journal entry required" In the first account fleld.)
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