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Question #1 On April 1, 2020, Jenson Ltd., a private enterprise, acquired 2,500 shares of...

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Accounting

Question #1

On April 1, 2020, Jenson Ltd., a private enterprise, acquired 2,500 shares of Lam Corp. for $50,000. This investment represents a 18% interest in Lam Corp. and Jenson Ltd. uses the cost method to record the investment. On October 31, 2020, Lam Corp. paid a $42,000 dividend to its shareholders. At March 31, 2021, Lam Corp.'s shares were valued at $45 per share and Lam Corp. reported net income of $145,000 for the year. On May 15, 2021, Jenson Ltd. sold the shares for $20,000. Both Jenson Ltd. and Lam Corp. have March 31, 2021 year-ends.

Required:

Prepare dated journal entries for the investment on the acquiring company's books from acquisition to disposal. Ignore income taxes. Journal entry descriptions are optional.

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