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On January 1, 2021, American Corporation purchased 25% of the outstanding voting shares of Short...

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Accounting

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On January 1, 2021, American Corporation purchased 25% of the outstanding voting shares of Short Supplies common stock for $210,000 cash. On that date, Short's book value and fair value were both $840,000. The equity method is deemed appropriate for this investment. Short's net income reported on December 31, 2021, was $80,000. During 2021, Short also paid cash dividends in the amount of $24,000. Required: Prepare the journal entries necessary to record the above information on American Corporation's books during 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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