Selk Steel Company, which began operations in Year 1, had the following transactions and events...

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Accounting

Selk Steel Company, which began operations in Year 1, had the following transactions and events in its long-term investments.

Year 1

January 5 Selk purchased 70,000 shares (20% of total) of Kildaire's common stock for $2,030,000.

October 23 Kildaire declared and paid a cash dividend of $3.80 per share.

December 31 Kildaires net income for the year is $1,178,000, and the fair value of its stock at December 31 is $37 per share.

Year 2

October 15 Kildaire declared and paid a cash dividend of $3.50 per share.

December 31 Kildaires net income for the year is $1,177,000, and the fair value of its stock at December 31 is $39 per share.

Year 3

January 2 Selk sold 3% (equal to 2,100 shares) of its investment in Kildaire for $67,700 cash.

January 5	Selk purchased 70,000 shares (20% of total) of Kildaire's common stock for $2,030,000.
October 23	Kildaire declared and paid a cash dividend of $3.80 per share.
December 31	Kildaires net income for the year is $1,178,000, and the fair value of its stock at December 31 is $37 per share.

October 15	Kildaire declared and paid a cash dividend of $3.50 per share.
December 31	Kildaires net income for the year is $1,177,000, and the fair value of its stock at December 31 is $39 per share.

January 2	Selk sold 3% (equal to 2,100 shares) of its investment in Kildaire for $67,700 cash.

Problem 15-6A (Algo) Accounting for long-term investments in stock without significant influence LO P4

Assume that although Selk owns 20% of Kildaires outstanding stock, circumstances indicate that it does not have a significant influence over the investee.

Required:

Prepare journal entries to record the preceding transactions and events for Selk.

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